Gold is highly sensitive to rising U.S. interest rates as these increase the opportunity cost of holding non-yielding bullion while boosting the dollar in which it is priced.

The Dow Jones Industrial Average rose 112.73 points, or 0.54 percent, to 20,950.1, the S&P 500 gained 19.81 points, or 0.84 percent, to 2,385.26 and the Nasdaq Composite added 43.23 points, or 0.74 percent, to 5,900.05. The pair has made session high at 1.0770 and hit lows at 1.0706 levels. It touched a high of $1.0740 Wednesday. Oil prices slipped as support from a weaker dollar was offset by USA crude inventories near record high levels.

U.S. Treasury yields fell sharply in reaction to the Fed's rate view for the rest of the year, prompting the dollar to fall more than 1 percent against the yen. Prices were up 63 cents, or 1.24 per cent, at $51.55 a barrel.

The Bank of England and the Swiss National Bank are due to make policy decisions later in the day, with both central banks expected to stand pat on monetary policy. USA light crude settled 11 cents lower at $48.75 a barrel. Australia's jobless rate climbed to a 13-month high in February and employment unexpectedly fell, a risk to the outlook for wage growth and inflation that will likely keep open the possibility of another interest rate cut.

The Aussie was down 0.3 percent at $0.7687 following its overnight surge of 2 percent to a three-week high of $0.7720.

Markets also reacted positively after Dutch center-right Prime Minister Mark Rutte fought off a challenge by anti-immigration, anti-European Union rival Geert Wilders to score an election win seen as a victory against populist nationalism.

US stocks slipped on Thursday pressured by healthcare shares as traders cashed in gains from one of the best performing sectors so far this year.

Yields on 10-year U.S. Treasuries nursed their heaviest falls since last August.

The drop in the dollar came after the Fed did not flag any plan to speed up the pace of monetary tightening, with Fed Chair Janet Yellen reiterating that the pace of rate hikes would be gradual.

Oil prices rebounded, lifted by a surprise drawdown in USA inventories and data from the International Energy Agency suggested Opec cuts should create a crude deficit in the first half of 2017.

US two- and three-year yields, which are most vulnerable to Fed policy, fell from multi-year highs touched during morning USA trading.

With a Fed rate increase seen as a done deal, investor focus is shifting to what message the U.S. central bank will deliver after its meeting on Wednesday.

Commodities rallied on the weaker dollar, with spot gold hitting a ten-day high of $1,228.81 an ounce, after enjoying its biggest daily jump since September.

U.S. Gold futures was up 2% at $1225 per ounce, before Federal Reserve's statement was announced on Wednesday.