Gold rose the most in six months in New York after the Federal Reserve committed to buy as much as $1.15 trillion of bonds and mortgage debt to cut borrowing costs, reviving concern that inflation will accelerate. The dollar fell as much as 1.5 percent against the euro following a 3.6 percent drop yesterday after the Fed statement. The central bank pledged to buy as much as $300 billion of Treasuries, as well as $750 billion of mortgage-backed securities and $100 billion in debt from government-sponsored enterprises, to ease credit and boost the housing market. Gold, which sank the most in two months before the Fed’s announcement, is up 7.6 percent this year. “Investors are worried the Fed will print as much money as they need to and this is going to lead to some insanely hot inflation, so they’re out buying gold,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. “The dollar got clobbered. You print more money and it buys you less.” Gold futures for April delivery surged $62.70, or 7.1 percent, to $951.80 an ounce at 9:50 a.m. on the New York Mercantile Exchange’s Comex division. A close at that price would mark the biggest gain since Sept. 17. The metal advanced to $937.25 in the morning “fixing” in London, used by some mining companies to sell production, from $893.25 at yesterday’s afternoon fixing. Bullion for immediate delivery in London rose $7.92, or 0.8 percent, to $949.92 an ounce. Prices jumped about $56 after the Fed announcement before the London market closed yesterday. Comex trading closed before the announcement, at about 2:15 p.m. in Washington. ‘Far From Recovery’ “The effects of the announcement were magnified as it portrayed the fact that perhaps the economy is far from recovery,” Emanuel Georgouras, a precious-metals trader at Marex Financial Ltd. in London, wrote today in a note. “Should quantitative easing continue, you can expect to see further gains in gold.” The Fed kept its benchmark lending-rate target range at zero to 0.25 percent and said it may keep it there for an “extended” time. Central banks are lowering interest rates and spending trillions of dollars in response to the worst financial crisis since the Great Depression. That may devalue currencies and boost demand for bullion as an alternative investment. “With the interest-rate tool out the window, the Fed is cranking up the printing press,” LaSalle’s Zeman said. The dollar yesterday fell 2.7 percent against a weighted basket of six major currencies and traded as much as 2 percent lower today, falling for an eighth straight session. Gold historically has moved inversely to the U.S. currency, though the correlation hasn’t held for much of 2009 as investors sought the safety of both assets. Exchange-Traded Products Investors are continuing to buy gold in a bid to protect their wealth. Assets in the SPDR Gold Trust, the biggest ETF backed by bullion, expanded 1.4 percent to a record 1,084.33 metric tons yesterday, according to the company’s Web site. ETF Securities Ltd.’s exchange-traded products backed by bullion attracted almost $134 million last week, the company said today. Gold’s climb since yesterday is “insane” because U.S. inflation may not accelerate until 2011, said Peter Fertig, owner of Quantitative Commodity Research Ltd. “There’s no real spillover from the monetary system to the real economy yet,” Fertig said today by phone from Hainburg, Germany. “The U.S. is far from inflationary pressures. It will take some time before the gap is closed.”

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