Spot gold traded near a one-week high on Thursday after the U.S. Federal Reserve surprised markets by postponing a wind-down of its commodities-friendly monetary stimulus and the dollar tumbled to seven-month lows.
U.S. gold futures jumped as much as 4.6 percent on the decision, while silver futures gained 7 percent, tracking spot prices’ gains from the previous session.
The absence of key buyer China, which is closed for the Mid-Autumn Festival holiday, kept gains in check.
Fed Chairman Ben Bernanke on Wednesday refused to commit to begin reducing the bond purchases this year, and instead went out of his way to stress the program was “not on a preset course”. In June he had said the Fed expected to cut back before year end.
Many economists had expected a $10 billion reduction to the bank’s $85 billion monthly bond purchases.