WWas S&P downgrading government bonds essentially an upgrade for gold?

''Gold Advances After Federal Reserve Pledges to Keep Rates at All-Time Low

Gold gained for a third session in New York after the U.S. Federal Reserve pledged to keep its benchmark interest rate at a record low through at least mid-2013, boosting demand for the metal as a protection of wealth.

The Fed also discussed a range of policy tools to bolster the economy, fueling speculation the central bank may consider a third round of quantitative easing through bond purchases to revive a recovery described as ''considerably slower'' than anticipated.

''Rising interest rates tend to detract from gold as investors looking for yields will look elsewhere,'' Darren Heathcote, head of trading at Investec Bank (Australia) Ltd., said by phone from Sydney. ''As long as rates stay low, particularly U.S. dollar, it will help to support gold, if not push it higher in due course.''

Gold futures for December delivery climbed $25.50, or 1.5 percent, to $1,768.50 an ounce by 7:58 a.m. on the Comex in New York, after yesterday reaching a record $1,782.50.

Bullion for immediate delivery gained $25.67, or 1.5 percent, to $1,766.07 an ounce in London. The price reached an all-time high of $1,780.10 yesterday and is up 24 percent this year, heading for an 11th year of gains.

Bullion rose to $1,753.75 an ounce in the morning ''fixing'' in London, used by some mining companies to sell output, from $1,736 at yesterday���s afternoon fixing.

Gold reached records after Standard & Poor���s cut the U.S. credit rating by one level from the top AAA grade on Aug. 5. The S&P announcement, combined with Europe���s sovereign debt crisis, spurred a rout in global equities and stoked concern that the U.S. may lapse into another recession.''