Gold posted its biggest daily percentage gain since Jan. 30 on Thursday following a more cautious than expected interest rate statement from the U.S. Federal Reserve.
U.S. gold futures for April delivery closed 1.5 percent higher at $1,169 an ounce, its highest settle since March 5.
Spot gold rallied to a peak of $1,177.46 an ounce earlier in the session and the dollar tumbled after the U.S. Federal Reserve signalled a slower pace of interest rate hikes and gave a cautious outlook for the U.S. economy.
Gold failed to maintain those gains, however, as the dollar recovered from an early low to rise 0.6 percent against a currency basket. The U.S. unit extended gains after jobless data indicated the American labor market remained on a solid footing despite slowing economic growth.
Spot gold was up 0.2 percent at $1,169 an ounce.
Gold hit a four-month low this week and remains down nearly 2 percent on the year on expectations that higher interest rates could lift the opportunity cost of holding non-yielding bullion.
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