Gold futures logged the biggest one-day gain so far this year on Tuesday as Federal Reserve Chief Ben Bernanke signalled the central bank would continue with its bond-buying programme.

Gold for April delivery rose $28 or 1.8% to settle at $1,615.50 an ounce on the Comex division of the New York Mercantile Exchange.

Demand for the yellow metal has been boosted by the easy money programme amid fears of increased inflation and a weaker dollar. Bullion is often used as a hedge against inflation.

Recently there had been concern that the Fed would wind down its quantitative easing programme or stop it earlier than expected but Bernanke's comments reassured investors.

He said: "We do not see the potential costs of the increased risk taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery. Inflation is currently subdued and inflation expectations appear well anchored."

Meanwhile safe haven flows were boosted by uncertainty in the wake of Italy's elections. Voters overwhelmingly favoured anti-austerity parties, making it difficult for the government to push through reforms aimed at tackling its budget.

Silver for May delivery climbed 27 cents at $29.32 an ounce.

Crude oil futures oil futures settled lower on Tuesday while gasoline futures tumbled 2.6%.

Crude oil for April delivery fell 48 cents to settle at $92.63 a barrel on the New York Mercantile Exchange amid nerves about Italy's elections and the outlook for oil demand in the Eurozone.


CJ

Related share prices