The US central bank has repeated its vow to protect the US economy amid rising coronavirus rates and worries about growth. Coronavirus infections have exploded in several Southern and Southwestern states in recent weeks, and some states have paused or rolled back reopening measures. More than 150,000 Americans have died from COVID-19, the respiratory illness caused by the novel coronavirus.
But it warned that the long term path of the economy was bound up with the path of the virus.
Bullion has been supported as the U.S. central bank left interest rates near zero and vowed to use all its tools to drive the recovery from the downturn that Chair Jerome Powell called the most severe "in our lifetime".
The vote, to leave the federal funds target rate in a range of 0 per cent to 0.25 per cent, was unanimous.
"The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals", the statement said. The 10-year Treasury yield was steady on the day around 0.58 per cent as the US bond curve steepened.
Meanwhile, the dollar index dropped to a near two-year low against its rivals, making gold less expensive for holders of other currencies.
"But they can't tame the virus or manufacture demand, and that's what the economy desperately needs in order to bounce back", he said.
"The most notable thing is the statement that the path of the economy will depend on COVID-19. That sentence shows the primacy of COVID-19 in their outlook and the uncertainty of their outlook because of it".
Fed officials had been expected to spend some of their meeting debating whether and how to strengthen their so-called forward guidance, perhaps by promising there would be no changes to interest rates until the unemployment and inflation rates meet explicit benchmarks.
Since the Fed's last policy meeting in June, the epidemic has intensified, with an average of around 65,000 new cases detected each day, about three times the pace of mid-June.
Government aid that kept millions of unemployed Americans spending will drop sharply at the end of this week unless Congress agrees on a new relief package, with Republicans and Democrats so far not able to bridge their differences.
Small businesses, a mainstay of the US economy, are increasingly facing a breaking point as government grants run dry and payments come due.