Gold surged the most in nine months and silver jumped to a 13-week high as the Federal Reserve said U.S. interest rates will remain low, driving the dollar down and boosting demand for the metals as alternative investments.

Gold topped $1,300 an ounce and silver rose the most in four months, leading a gauge of 24 commodities to the highest since August. The greenback fell to a four-week low against a basket of 10 major currencies. Yesterday, Fed Chair Janet Yellen said rates will probably remain low for a considerable time after debt purchases by the central bank end.

Last year, gold fell 28 percent after some investors lost faith in the precious metal as a store of value amid an equity rally and muted inflation. The commodity climbed 70 percent from December 2008 to June 2011 as the Fed bought debt and held borrowing costs near zero percent.

“People perceived what Yellen said yesterday as less hawkish, and that’s bringing in money to the gold market,” Scott Gardner, who helps manage $450 million at Verdmont Capital SA in Panama City, said in a telephone interview. “The dollar is moving lower, and gold is gaining because of that.”

Gold futures for August delivery rose 3.3 percent to settle at $1,314.10 at 1:36 p.m. on the Comex in New York, the biggest gain for a most-active contract since Sept. 19. Earlier, the metal reached $1,317.40, the highest since April 15.

Trading was 52 percent higher than the 100-day average for this time, according to data compiled by Bloomberg.

More Dovish

“The FOMC policy statement did not contain major surprises, although at the margin, the general tone was probably more dovish than expected,” UBS AG analysts including Edel Tully said in a report. “In effect, the lack of an aggressive Fed is gold-supportive.”

The Federal Open Market Committee cut asset purchases at the end of a two-day meeting for the fifth straight time. Fed participants estimated long-term growth for the U.S. economy of 2.1 percent to 2.3 percent, compared with 2.2 percent to 2.3 percent in March and 2.5 percent to 2.8 percent in January 2010.

Gold traded above the 100-day moving average, a bullish signal to some analysts who study historical price patterns, said Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago.

“A lot of technical buying is helping gold,” Streible said in a telephone interview. “We saw a lot of buying come in once the market moved above $1,300.”

The metal has climbed 9.3 percent this year, partly on concern that economic growth in the U.S. was stalling.

Silver Jumps

Silver futures for July delivery soared 4.4 percent to $20.648 an ounce on the Comex, the biggest gain since Feb. 14. The increase was the biggest among the 24 raw materials in the Standard & Poor’s GSCI Spot Index, followed by gold.

This year, silver has climbed 6.6 percent.

Members of the London Bullion Market Association will hear proposals tomorrow on alternatives to the 117-year-old London silver-fixing benchmark that is ending in August. The agreement should be reached by the market and announced in early July, the group said today.