Spot gold was up 0.08 percent to $1,320.58 per ounce at 12:33 p.m. ET. Its session high was $1,326.30, the highest since April 26.
Spot gold has gained more than 3 percent so far this month.
U.S. gold futures rose 0.74 percent to $1,325.30.
“The ongoing trend in precious metals markets continues. The much more dovish-than-expected Fed stance continues to support commodity prices across the board, weaken the dollar and support the precious metals complex as well,” said David Meger, director of metals trading at High Ridge Futures.
The dollar also modestly extended losses after data showed the number of Americans filing for unemployment benefits rose to a 1-1/2-year high, feeding concerns of an economic slowdown.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, have climbed 4.6 percent this month, the biggest monthly gain since September 2017.
On Wednesday, the Fed offered no alterations to its interest rate outlook, conceding quivers in the country’s “macroeconomic performance.” It said its balance sheet would remain larger than anticipated.
Analysts said market players see a much slimmer chance of a rate hike, while the U.S. Treasury yield curve now portends possible Fed rate cuts. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
“The market now sees about a one-in-four chance of a 2019 Fed rate hike, while the curve is pointing to a small chance of a cut occurring as early as 2020,” INTL FCStone analyst Edward Meir said in a note.
While the news propelled world stocks to their biggest January gains on record, risks to the global economy remain, with market participants focused on trade talks between the United States and China.
Investors worry Washington’s criminal charges against Chinese company Huawei and its chief financial officer could hurt the talks.
If the sides cannot reach a deal, Washington has threatened to more than double tariffs on Chinese goods on March 2.
Global demand for gold rose 4 percent last year, as central bank purchases surged to their highest levels since 1967, the World Gold Council said.
Palladium fell 0.37 percent to $1,356, while platinum rose 0.25 percent to $817.
Silver fell 0.09 percent to 16.05 having hit its highest since July 2018, at $16.19, during the session.