Gold futures rallied on a one-two lift as the US Federal Reserve vowed to hold interest rates lower for longer and sustain vast stimulus to support a recovery from the coronavirus pandemic, and investors tracked signs of a resurgence in infections in some US states. The haven pushed higher after chairman Jerome Powell said the Fed is committed to “do whatever we can, for as long as it takes", speaking after policymakers held the benchmark rate near zero on Wednesday. Almost all officials forecast keeping rates near zero through 2022, and the central bank also said it will at least maintain the current rate of bond purchases. Bullion advanced 14 per cent in 2020 as virus-related lockdowns savaged growth and spurred unprecedented stimulus. The Organisation for Economic Co-operation and Development forecast a slump of 6 per cent in the global economy this year, a deeper contraction than the World Bank had predicted. Meanwhile, America’s top infectious-disease specialist warned the outbreak is far from over, after Texas, Florida and California all reported worrying trends. “The reason that ultra-loose monetary policy is a positive for gold is that it applies downward pressure to long-term US real yields,” Vivek Dhar, an analyst at Commonwealth Bank of Australia, said in an email. That “effectively increases the appeal of the precious metal relative to US-interest earning assets". Futures rose as much as 1.7 per cent to $1,749.80 an ounce on the Comex, and traded at $1,742.50 at 7:41am in the UAE. Spot gold was 0.3 per cent weaker after climbing 1.4 per cent on Wednesday as Treasury yields fell along with the dollar. “With rates staying where they are for longer, and real rates expectations potentially shifting to more negative, then I think the conditions are here for gold still going to $1,800,” said Dominic Schnider, head of commodities & Asia Pacific currencies at UBS. Before his week’s Fed meeting, Goldman Sachs Group also forecast bullion would rise to $1,800 an ounce over 12 months. That’s above the peak in futures earlier this year of $1,788.80, which was the highest since 2012.