Gold surged over 3% on Tuesday after the U.S. central bank cut interest rates to help cushion the economic damage caused by the coronavirus outbreak and on expectations of policy easing by other major central banks.

Spot gold climbed 3.4% to $1,643.10 an ounce by 2:10 p.m. EST, set for its biggest one-day percentage rise since June 2016. U.S. gold futures jumped 2.7% to $1,642.50.

Prices earlier soared as much as 3.3% after the U.S. Federal Reserve cut interest rates in an emergency move to combat the world’s largest economy from the impact of the coronavirus.

“Clearly the Fed delivered a very strong signal that they are ready to support the U.S. economy against the growing threat of the virus and this is quite a green light for other central banks to do the same,” said Daniel Ghali, commodity strategist at TD Securities.

The Fed said it is cutting rates by a half percentage point to a target range of 1.00% to 1.25%. In a news conference following the decision, Fed Chair Jerome Powell said the coronavirus would weigh on the U.S. economy for some time.

“An inter-meeting cut, the first since 2008, also sends a message that the Fed is all-hands on deck,” said Tai Wong, head of base and precious metals derivatives trading at BMO.

“This should be positive for equities and positive for gold, at least short term, with rates lower and potentially other central bank action on the way.”

Lower interest rates reduce the opportunity cost of holding non-yielding bullion and also weigh on U.S. yields and the dollar, in which gold is priced.

The dollar index fell to its lowest in nearly 2 months against a basket of currencies.

Gold prices slumped as much as 4.7% on Friday amid a broader market sell-off but have recovered since.

“Gold is back above the $1,600 an ounce level and could be poised for another run towards the $1,700 level once governments announce the details to the major fiscal stimulus response,” said Edward Moya, a senior market analyst at broker OANDA, in a note.

The Fed decision came after the Group of Seven finance officials earlier on Tuesday said they would use all appropriate policy tools to support the economy against downside risks posed by the fast-spreading coronavirus.

Among other precious metals, palladium fell 1.2% to $2,493.57 per ounce, silver jumped 3.3% to $17.28 and platinum climbed 1.3% to $871.13.

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