Gold in New York surged the most since the September 11 terrorist attacks in the U.S. After the Federal Reserve suggested it may take a break from raising interest rates, eroding the value of the dollar.

Gold jumped 4.9 percent to 617.90 dollar an ounce last evening after the FED said more rate increase may be needed only if statistics warrant. The dollar fell versus euro on speculation. European Central Bank may raise rates faster than in the U.S.

Gold is up 18 percent this year as the dollar fell 7.2 percent against the euro. Silver also gained.

A close at that price would be the biggest gain since September 14, 2001, the first day of trading after the terrorist attacks closed U.S. Markets. The metal reached a 26-year high of 732 dollar on May 12.

In London, gold rose 12.75 dollar to 612.40 dollar an ounce on Friday. The metal is headed for a 4.1 percent gain for the second quarter, its fifth straight quarterly increase. Silver futures for August delivery rose 60 cents, or 5.8 percent, to 11.02 dollar an ounce.

Interest-rate futures show traders see 62 percent odds of a quarter-percentage point increase in the overnight lending rate between banks, to 5.5 percent, in August. Two days ago the figure was 85 percent.

A report today showing European confidence in the economy was the highest in five years ``is fueling speculation.

The EU will have to speed up rate hikes in the region,`` Marketmen said. ``The U.S. dollar is under heavy pressure against the euro which is causing a nice premium in gold.``