Gold turned higher on Wednesday, after the Federal Reserve said the U.S. economy is likely strong enough to support an interest rate increase by the end of 2015, causing the dollar to extend losses.
The U.S. economy, after contracting in the first quarter, is now on track to grow between 1.8 percent and 2.0 percent this year, according to the central bank's latest policy statement and new projections issued by Fed policymakers.
Read MoreFed leaves interest rates unchanged
was up 0.4 percent at $1,186.55 an ounce, after trading lower prior to the Fed statement. U.S. gold futures for August delivery settled down $4.10 at $1,176.80 an ounce.
"The FOMC (Federal Open Market Committee) statement recognized a rebound in activity from the first quarter but otherwise was remarkably indistinct from March," said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.
"The dot plot still indicated two hikes for the balance of 2015 but downgrades 2016 rate expectations."
The U.S. dollar extended losses against a basket of six major currencies after the Fed statement and fell as much as 0.80 percent.
"The Fed chair wants decisive evidence that moderate growth will be sustained," Wong said.
"Gold is moving higher on that decisive comment."
Expectations for an interest rate hike this year and a stronger dollar have weighed on the price of gold over the past few months, as this would increase the opportunity cost of holding the non-interest-bearing asset.
Platinum fell to its lowest since April 2009 at $1,066.50 an ounce amid a deterioration in investor sentiment, mostly in the euro zone, caused by the stand-off between Greece and its creditors, which both impact industrial demand for the metal, ABN Amro analyst Georgette Boele said.
It was trading at the cheapest to gold since January 2013, with a discount of more than $105 to the yellow metal.