Gold prices advanced after the Federal Reserve kept interest rates unchanged and signaled no rate hikes through 2022.
The interest rate remained in a range between zero and 0.25%.
Gold prices climbed following the announcement with August Comex gold futures last trading at $1,727.50, up 0.33% on the day.
The statement, released on Wednesday afternoon, reiterated that the Fed is ready and committed “to use its full range of tools” to support the U.S. economy.
"The coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world. The virus and the measures taken to protect public health have induced sharp declines in economic activity and a surge in job losses. Weaker demand and significantly lower oil prices are holding down consumer price inflation," the statement said.
The central bank noted improved financial conditions but projected hard times ahead for the U.S. economy despite surprisingly strong job numbers last month.
The Fed also released its first quarterly forecasts since December, including a dot plot of its rate projections. This comes after the central bank decided to suspend its forecast back in March due to all the uncertainty surrounding the coronavirus.
In the latest interest rate projections, the central bank's median forecast is for interest rates to remain at current levels through 2022.
Looking at growth, the Federal Reserve expects U.S. GDP to contract by 6.5% this year, down from December’s estimates of 2.0% growth. The U.S. economic activity is expected to grow 5% in 2021 and then 3.5% in 2022.
The U.S. unemployment rate is projected to be around 9.3% this year, followed by a recovery to 6.5% in 2021 and to 5.5% in 2022.
The U.S. central bank also expects price pressures to be weak with projections showing inflation at 0.8% this year, 1.6% in 2021, and 1.7% in 2022.
Core inflation expectations, which strip out volatile food and energy prices, are at 1% this year.
The Fed also promised to maintain bond purchases at least at the current pace of around $80 billion per month in Treasuries and $40 billion per month in agency and mortgage-backed securities.