Oil and gold rise on Fed decision

Both oil and gold rallied strongly on Thursday after the Federal Open Market Committee (FOMC), the rate-setting body of the US Federal Reserve Board, expected low interest rates to be kept in place until late 2014 - extending previous indications that rates would be static up to the second quarter of 2013.

Spot Brent crude was up at $110.15 a barrel, with gold performing strongly at $1,718 a troy ounce.

Continued nervousness over possible decline in oil demand from the eurozone, as major economies in the region look set to slip back into recession, were offset after threats from Iran that it would act first in the continued dispute over the European Union's decision to enact an oil embargo on the country.

The yellow metal has gained further appeal as a safe-haven alternative to US government debt, as global investors looking to reposition themselves away from market volatility continue to shun currencies as a stable store of value.

Ben Bernanke, chairman of the FOMC, suggested that another round of quantitative easing (QE3) was still an available tool for reinvigorating growth levels - should they once again become a strong concern for the US economy. The announcement was seen to indicate an increased probability of the Federal Reserve's QE programme continuing, leading some traders to move out of the currency and into the precious metal.

Expectations for the prices of gold and black gold remain strong over the medium term with uncertainty, in both issues around Iran and the health of the global economy, more broadly continuing to direct trading.

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