Spot gold climbed after the Federal Reserve repeated a vow to use all its tools to support the U.S. economy and warned that the resurgent coronavirus is weighing on the outlook.

The central bank, which left its benchmark interest rate unchanged near zero, also said it will extend emergency measures including temporary liquidity swap lines to ensure the global financial system has access to a ready supply of U.S. dollars. The dollar fell, and bullion headed for its ninth straight gain, the longest run since 2011.

Gold is on course for its biggest annual increase in more than a decade, driven by concern over the coronavirus pandemic and damage to economies, with gains supported by negative real yields and a weaker dollar. In remarks after the statement was released, Fed Chair Jerome Powell warned the U.S. faces the most severe economic downturn “in our lifetime,” with the path forward for the economy “extraordinarily uncertain.”

”I can’t think of anything more supportive of gold than the trifecta of longer, lower interest rates and the pandemic headlines,” George Gero, a managing director at RBC Wealth Management, said by phone. “The low interest rates will give you a benign dollar and a benign dollar is very helpful to gold prices because it makes it much more affordable globally.”

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Bullion for immediate delivery rose 0.5 per cent to US$1,968.39 an ounce at 4:23 p.m. in New York. The spot metal reached a record US$1,981.27 on Tuesday.

With more stimulus on the horizon, Goldman Sachs Group Inc. said that gold is the currency of last resort amid an inflation threat to the dollar. The bank forecasts a rally to US$2,300 an ounce.

Powell told reporters that supporting the recovery would need help from both monetary and fiscal policy, in a nod to ongoing negotiations among lawmakers and the Trump administration in Washington to refresh taxpayer support before current assistance runs out.

“The path forward for the economy is extraordinarily uncertain, and will depend in large part on our success in keeping the virus in check,” Powell told reporters in a virtual press conference Wednesday. “Indeed, we have seen some signs in recent weeks that the increase in virus cases, and the renewed measures to control it, are starting to weigh on economic activity.”

In its statement announcing the policy decision, the Federal Open Market Committee said the federal funds rate would remain near zero “until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”