Daily Gold Update

Source: MarketWatch

New York— Gold futures rallied Wednesday, with most other metals also posting gains, as the U.S. dollar fell sharply against other major currencies. Silver futures rallied more than 7%.Gold for February delivery surged $30.20, or 4%, to $872.90 an ounce in electronic trading on Globex. Earlier, the contract hit an intraday high of $873.20 an ounce.

Gold gained on the back of sharp weakness in the U.S. dollar. The greenback fell sharply against all its major rivals Wednesday, a day after the Federal Reserve decided to cut interest rates to historic lows and expand a program of extraordinary lending and other measures to attempt to lift the U.S. economy out of recession. The dollar index, a measure of the U.S. dollar against a trade-weighted basket of six currencies, fell 1.8% to 78.54, down from 79.921 in North American activity late Tuesday. "Note how rising risk aversion continues to fail in propping the dollar as was the case since the beginning of the market turmoil," said Ashraf Laidi, chief market strategist at CMC Markets. See full story.