Gold gained on Thursday on a lower dollar after the Federal Reserve said it remained committed to accommodative measures and low interest rates, while platinum rose as new hurdles emerged in settling South Africa's mining strike.
The U.S. central bank hinted at a slightly faster pace of interest rate increases starting next year, but lowered projections for the long-term target interest rate, sending the dollar to its lowest level in nearly two weeks.
The Fed cut its U.S. growth forecast for 2014 from 2.9 percent to a range of between 2.1 percent and 2.3 percent, but it also expressed confidence that the U.S. economic recovery was on track.
Spot gold edged up 0.3 percent to $1,28.140 an ounce by 1109 GMT, while U.S. gold futures for August delivery rose 0.7 percent to $1,281.60.
"In the short term, gold is still very much headline-driven, with what's happening in Iraq, as far as safe-haven buying is concerned," Mitsubishi Corp analyst Jonathan Butler said.
But for the medium-term, the Fed comments were not a major event for gold, which will still suffer from the central bank concluding its quantitative easing programme at the end of the year and raising interest rates some time in 2015", Butler added.
Gold rose at the same time as equities, as both assets benefited from a less hawkish view than expected from the Federal Reserve.
The metal tends to have an inverse relationship with equity markets, with investors seeking refuge from riskier assets in times of political or financial troubles. However, gold and equities have both been underpinned by accommodative monetary policies over the past few years.
Tensions over Iraq and Ukraine were still seen attracting some safe-haven bids for gold, having lifted crude oil prices to nine-month highs.
Gold is usually seen as an hedge against oil-led inflationary pressures.
Physical demand in top buyers China and India has been weak, with premiums in both countries dropping in recent days. Indian premiums are at a four-month low, while Chinese prices are trading between discounts and on par with global prices.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, saw two straight sessions of outflows earlier in the week before a pause on Wednesday.
Holdings of the fund are near a five-year low, reflecting bearish investor sentiment towards the metal.
Platinum rose 0.5 percent to $1,451.50 an ounce and palladium was up at $823.70 an ounce, with both trading near one-week highs as a mining strike in major producer South Africa looked set to drag on.
South African platinum union AMCU has made "unaffordable" new demands beyond a deal struck with producers last week, miners said on Wednesday, dashing hopes of an end to the country's longest and costliest mining strike.
Silver was up 0.3 percent to $19.91 an ounce.
Source: Reuters
