Fed officials, led by Chair Jerome Powell, have said repeatedly they expect price pressures to be transitory and monetary stimulus to stay in place for some time.
Physical gold demand in second-biggest bullion consumer India was negligible last week with most jewellery stores still shut by COVID-19 lockdowns, forcing dealers to offer steep discounts.
Spot gold rose 0.8pc to $1,896.74 per ounce by 1:42 p.m. EDT (1742 GMT), having earlier hit its highest since Jan. 8 at $1,898.40. U.S. gold futures settled up 0.7pc at $1,898.