Updated from 12:08 p.m. EST with Fed policy announcement and settlement prices
NEW YORK ( TheStreet) -- Gold prices climbed Wednesday as the Federal Reserve announced it would purchase longer-term Treasury bonds and attached a specific unemployment rate target to end the current federal funds rate. Gold for February delivery added $8.30 to settle at $1,717.90 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,725 and as low as $1,708.50 an ounce, while the spot price was ticking up $1.10, according to Kitco's gold index. The Federal Open Market Committee -- the policy-making arm of the central bank -- said it would begin to purchase $45 billion of longer-term Treasury bonds per month for an open-ended period, and that it would keep rates low at least for as long as the U.S. unemployment rate remained above 6.5%. The new stimulus would replace Operation Twist, which concludes by the end of 2012. The central bank said it would maintain the monthly $40 billion open-ended, mortgage-backed security purchasing program it implemented in September. An increasing number of economists and analysts had predicted that the Fed would implement some sort of increase in monetary stimulus in the latest Federal Open Market Committee (the Fed's policy-making arm) meeting. "I think there's going to be an extension of either the Operation Twist or expanding the balance sheet to purchase long-term treasuries," said Jeb Handwerger, editor of GoldStockTrades.com. "So we think that the Fed is going to do whatever it can, including a fresh round of bond buying, to support the economic recovery." Silver prices for March delivery jumped 77 cents to $33.78 an ounce, while the U.S. dollar index was shedding 0.32% to $79.79. Gold prices climbed on Monday as investors bought into new positions on speculation that the Fed would implement additional easing for its latest policy meeting. More easing by the central bank may be viewed as an inflationary action, which would make gold an appealing hedge. "I think more easing will help to increase the sentiment towards gold; I think now that gold tested the bottoms in the $1,680s an ounce ... what you're going to want to see now is if there's any kind of a catalyst to get people jumping back in, pushing that metal higher," said David Banister, chief investment strategist at TheMarketTrendForecast.com. The yellow metal continued to keep an eye on so-called fiscal cliff discussions, but appeared to be little changed by Tuesday's roller coaster reports. Early market sentiment fueled the major U.S. indices to a decent rally for most of the day until Senate Majority Leader Harry Reid emerged to tell reporters that he believed it would be extremely difficult to reach an agreement before Christmas. President Barack Obama and House Speaker John Boehner have remained quiet about details of their latest meetings.