Gold prices rallied on Thursday as investors tried to escape the global market rout by hiding out in safe-haven assets. Gold for April delivery jumped $30.10, or 2.5%, to $1,224.70 an ounce, setting it on track for the highest close since May last year. The positive session for the metal came as equities tanked in Asia and Europe and U.S. stock futures pointed to a sharply lower open. "Renewed ETF inflows have been lending support to the price surge: in the first eight days of trading in February, just as much gold has flowed into the ETFs as did in the whole of January," analysts at Commerzbank said in a note. They also noted that Federal Reserve Chairwoman Janet Yellen during her congressional testimony on Wednesday signaled that the central bank could postpone further rate increases if the current jitters in global markets persist. That drove down the dollar, with the greenback slumping to the lowest level against the yen since late 2014. A weaker U.S. currency tends to support dollar-denominated commodities, such as gold, as they become cheaper for foreign currency holders.
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