Metals Follow Stocks Higher

Updated from 12:30 p.m. EDT

Gold and metals rose Thursday ahead of what turned out to be a benign statement from the Federal Reserve, which delivered a quarter-point rate hike.

Gold for June delivery gained $7.90, or 1.4%, to close at $588.90. Among other metals, silver for July delivery rose 17 cents, or 1.7%, to $10.42 an ounce and copper for July delivery rallied 13.4 cents, or 4.2%, to $3.32 a pound.

While the Fed decision and accompanying comments came out after the close of the metals market, the shares of metals-mining stocks were sharply higher in recent action, tracking a rally on Wall Street.

The Philadelphia Gold and Silver index was recently up 6.4%, the Amex Gold Bugs index was up 7.4% and the CBOE Gold index was up 6.6%.

"We're already seeing a big bounce in gold stocks," says Amaury Conti, mining stock trader at Austin Calvert-Flavin. "We were due for a relief rally."

Several changes in the Fed's language energized investors hoping for a sign that the Fed will soon pause, if not stop, its two-year long campaign to raise rates.

When it hiked rates in May, the Fed had said that it expected economic growth to moderate. In the statement accompanying Thursday's hike, it says "economic growth is moderating from its quite strong pace earlier this year."

While noting that "some inflation risks remain," the Fed said that further tightening of monetary policy "may be needed." Last month it declared further tightening "may yet be needed."

Metals and commodities have taken a severe beating since mid-May, when the Fed signaled it would continue to hike rates -- even if the economy is expected to decelerate -- to quell what it described as threatening inflationary pressures.

Commodity bulls feared that more rate hikes would hurt growth and sap demand for raw materials.