Gold surged sharply higher Wednesday -- climbing beyond $1,680 per ounce with a rise of more than $16 per ounce -- while the U.S. dollar weakened to a 14-month low against the euro.

Gold bullion investment vehicle SPDR Gold Trust (NYSEMKT:GLD) notched a 1% advance intraday, while silver bullion proxy iShares Silver Trust (NYSEMKT:SLV) gained 2.4%. Related mining stocks were largely excluded from the rally, as the Market Vectors Gold Miners Index ETF (NYSEMKT:GDX) hovered near the unchanged mark in early afternoon trading.

Mark Chandler, head of global currency strategy for Brown Brothers Harriman, was quoted by The Wall Street Journal as pointing to more evidence today "that a tightening of euro-area financial conditions is under way." The European Central Bank committed only $5 billion to its latest refinancing operation, according to the Journal

In the United States, meanwhile, news of a 0.1% contraction in U.S. GDP during the fourth quarter of 2012 prompted currency traders to anticipate reduced consideration within the Federal Open Market Committee (FOMC) for an early cessation of the Federal Reserve's asset-purchase program. Earlier this month, minutes released from the FOMC's December meeting revealed that several members "thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet."

With respect to the FOMC policy statement due for release Wednesday afternoon, DailyFX currency strategist Ilya Spivak foresees a "stronger dovish tone" within the statement as concerns over lackluster domestic growth trump dissenting concerns over the risks from sustained loose monetary policy.


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