The price of spot gold climbed as high as $1,398.80 per ounce in early trading hours, their highest since early September 2013, triggering a fall in the US dollar and treasury yields. Investors often flock to precious metals in times of economic uncertainty, with gold being seen as a safe haven commodity. By 11.52am BST, the price of spot gold had fallen back slightly to $1,396.00, according to data from Bullion By Post. Silver was worth $15.33 per ounce, while platinum was trading hands at $808.92 per ounce.
Palladium was at $1,495.85 per ounce at the same time of writing.
Global markets have been left rattled in recent weeks with fears of a global slowdown in growth escalating amid the ongoing trade war between the US and China.
Both nations have been at loggerheads for several months and have been slapping sanctions on the opposing side.
The Fed suggested it was ready to battle growing global and domestic economic risks, signalling a rates cut could come as soon as next month.
The US central bank left its benchmark rate unchanged this week, but its shift in sentiment was not left unnoticed by traders.
The bulk of Fed policymakers slashed their rate outlook for the rest of the year by roughly half a percentage point, and Fed Chairman Jerome Powell said others agree the case for lower rates is building.
It dropped its pledge to be “patient” before rate moves in a sign it was poised to act, while Mr Powell stopped referring to weak inflation as “transient”.
Ryan Giannotto, director of Research at GraniteShares, said: “More than the actual impact itself, was the shift in expectations.
“Expectations were very high for the Fed and the market was forecasting this.
“But the real risk was that it would not satiate investors’ demand for dovishness.”
New economic projections showed policymakers’ views of growth and unemployment largely unchanged, policymakers saw headline inflation at just 1.5 percent for the year, down from the 1.8 percent projected in March.
They also expect to miss their 2.0 percent inflation target next year as well.