Gold prices increased by almost 3% today as the Federal Reserve announced that it would postpone the tapering of its billion-dollar bond-buying program. Gold is currently at $1,346 an ounce and climbing as today’s announcement signaled bad news for the value of the U.S. dollar.

Saying that they want to see more evidence that the economy can sustain improvement before tapering bond purchases, the Federal Reserve decided on Wednesday to postpone the previous plan to scale back in September. The Fed had been on the fence leading up to this meeting and that caused most gold investors to proceed with caution. When the news hit, however, investors pounced on the yellow metal.

The Fed did state that they are poised to reduce the program if they see more evidence of a strengthening economy, but it could take months to get in enough data to convince them. The Fed policy-making committee said, “We decided to await more evidence that progress will be sustained before adjusting the pace of the purchases…bond purchases were not on a preset course.”

Based on their latest economic projections, the Federal Reserve officials also decided to keep short-term interest rates near zero until at least 2015. Some forecasts have experts predicting that these low interest rates could stay around until the end of 2016.

This is all good news for physical gold. By keeping the bond-buying program in place, the Fed is keeping the value of the U.S. dollar down, making physical gold an excellent hedge against the potential inflation. The crisis in the Middle East should also cause a lot of uncertainty with the stock market, which may drive even more investors to the security of physical gold as well.

Gold spot price is currently at $1,340.70 (+$30.90) an ounce as of 2:48PM EST on Wednesday, September 18, 2013.