Spot gold was up 1.6%, its most since Oct. 13, to $1,798.05 per ounce at 10:29 a.m. EDT (1429 GMT). U.S. gold futures for December delivery jumped 1.9% to $1,797.00.
The Fed indicated that they are probably not going to mess with interest rates, and that is bullish for metals, said Bob Haberkorn, senior market strategist at RJO Futures.
The Federal Reserve and its chair, Jerome Powell, on Wednesday signaled the central bank would stay patient - and wait for more job growth - before raising interest rates, while beginning to trim its massive bond-buying program this month.
Ultra-loose U.S. monetary policy has helped drive gold sharply higher since the financial crisis of the late 2000s, with low interest rates cutting the opportunity cost of holding non-yielding assets and inflation fears stoking demand for a hedge.
"The Bank of England leaving rates unchanged overnight shows central banks right now don't have an appetite for higher rates," Haberkorn said, adding that gold could by Friday go "north of $1,800 just based on sentiment and the technicals."
The Bank of England kept interest rates on hold on Thursday, dashing expectations for a hike that would have made it the first of the world's big central banks to raise rates after the pandemic.
Independent analyst Ross Norman said strong physical demand for gold was supporting the market, as India's Diwali festival generally boosts sales of the precious metal.
Elsewhere, spot silver rose 2.1% to $23.98 per ounce. Platinum gained 0.7% to $1,036.43 and palladium jumped 1.5% to $2,030.34.
(Reporting by Bharat Govind Gautam and Amy Caren Daniel in Bengaluru; Editing by Maju Samuel)
By Bharat Gautam
