Both oil and gold rallied strongly on Thursday 28 January after the Federal Open Market Committee (FOMC), the rate-setting body of the US Federal Reserve Board, said it expected low interest rates to be kept in place until late 2014.

This extends previous indications that rates would be static up to the second quarter of 2013.

Spot Brent crude was up at $110.15 (£70.21) a barrel, with gold performing strongly at $1,718 (£1,095) a troy ounce.

Continued nervousness over a possible decline in oil demand from the eurozone, as major economies in the region look set to slip back into recession, were offset after threats from Iran that it would act first in the continued dispute over the European Union's decision to enact an oil embargo on the country.

The yellow metal has gained further appeal as a safe haven alternative to US government debt, as global investors looking to reposition themselves away from market volatility continue to shun currencies as a stable store of value.

Ben Bernanke, chairman of the FOMC, suggested that another round of quantitative easing (QE3) was still an available tool for reinvigorating growth levels – should they once again become a strong concern for the US economy. The announcement was seen to indicate an increased probability of the Federal Reserve's QE programme continuing, leading some traders to move out of the currency and into the precious metal.

Alan Thein, co-manager of Legal & General's multi-manager fund range, says he considers the Federal Reserve to be the 'most aggressive central bank'.

He adds: 'An extended period of close to zero rates (and negative real rates) is supportive of further gains in the price of gold and the prospects for gold miners, which we believe are a notably undervalued area of the market.'

Expectations for the prices of gold and oil, dubbed black gold, remain strong over the medium term with uncertainty, around Iran and the health of the global economy, continuing to direct trading.

This was written for our sister website, Interactive Investor