Gold surged nearly 4% on Thursday to its highest in a year as fears about financial instability, a lower dollar and U.S. Treasury yields persuaded investors to seek refuge in the precious metal.

Traders said financial instability fears were fueled by European bank shares slumping to multi-year lows, with concerns mounting over banks’ profitability in a low-growth and low-interest rate environment.

Spot gold jumped as much as 3.6% to $1,240.90 an ounce, its highest since February 2015, and was up 3% at $1,233.70 at 1254 GMT. It is on track for its biggest daily rise since Dec. 1, 2014.

“We have a good explanation for gold’s rally; it is to do with worries about the U.S. economy and the rest of the world,” Macquarie analyst Matthew Turner said.

“Investors are concerned that central banks’ solution [is] negative interest rates or at least not raising rates—and that is gold friendly. The key risk to gold is that the U.S. economy manages to put in a good performance, like it did last year.”

Cautious comments from the head of the U.S. Federal Reserve were taken to mean no near-term interest rate hikes. A slower pace of rate rises keeps down the opportunity cost of holding gold.

Longer-term U.S. debt rallied as investors wagered that the Fed would either be unable to tighten at even a gradual pace, or that if it does increase rates that would only hasten the arrival of recession and deflation.

The benchmark 10-year U.S. Treasury yield fell to lows last seen at the end of 2012 when the Fed was busily printing money. Because gold does not pay interest, the fall in returns from U.S. bonds is seen as positive for the metal.

Gold option volatility surged to the highest in more than a year as investors have placed new bullish bets that prices will extend their recent rally.

Gold-backed exchange-traded funds (ETFs) have recorded net inflows since the start of the year, signaling renewed investor interest.

“Investors are returning to gold as a core diversifier and safe haven investment,” James Butterfill, head of research at ETF Securities, said in a note. “Given the increasingly challenging investment and economic environment, we expect this trend to continue.”

Silver rose 1.9% to $15.60 an ounce, its highest since November 2015.

Spot platinum climbed 1.2% to $938.49 while palladium rose 0.1% to $522.50.