SINGAPORE (Commodity Online) : Gold prices extended gains in Asian trade Wednesday after US Fed kept interest rates unchanged that boosted the metal's investment appeal.

Gold for immediate delivery was seen trading at $1126.62 an ounce at 11.30 a.m Singapore time while April delivery was seen trading at $1126.85 an ounce at the same time.



Gold has risen as much as 2.6 percent this week after investors turned to the metal for safety because of currency volatility related to debt problems in Europe, but a break above a recent high near $1,150 was needed to sustain the gains.

A firmer euro supported gold but there were also worries China would tighten up after consumer inflation jumped to a 16-month high, possibly denting its appetite for commodities.

China has already tightened bank reserve requirements twice this year, with each move hitting commodity markets worried about demand growth.

On Tuesday, most-actively traded April gold had gained $17.10, or 1.5 per cent, to settle at $1122.50 an ounce, while thinly traded nearby March gold rose $17.10, or 1.5 per cent, to $1122.20 on the Comex division of the New York Mercantile Exchange.

Meanwhile, the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at 1,115.511 tones as of March 16, unchanged from the previous business day.

The dollar held near one-month lows against a basket of currencies on Wednesday as investors cut long positions after the U.S. Fed retained its dovish bias by pledging to keep interest rates low.

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