Fed Sparks Gold Rally

Updated from 12:42 p.m. EDT

Gold and metals rose sharply on Friday amid a dollar sell-off after the Federal Reserve gave a benign outlook about future hikes in interest rates on Thursday.

Gold for August delivery surged above the $600 mark to finish on a gain of $27.80, or 4.7%, to $616.70.

Among other metals, silver for July delivery gained 57 cents, or 5.5%, to $10.99 an ounce, while copper for July delivery rose 3.9 cents, or 1.17%, to $3.36 a pound.

The metals market, which was closed Thursday by the time the Fed delivered its quarter-point rate hike and made conditional comments about future policy, rallied overseas and at the opening of trading Friday.

Several changes in the Fed's language energized investors hoping for a sign that the Fed will 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 said "economic growth is moderating from its quite strong pace earlier this year."

Commodities have sold off over the past month and a half amid worries that the Fed might lift interest rates too much, hurting a U.S. economy that is already showing signs of slowing. This, commodities bulls feared, would curb global growth and demand for raw materials.

The dollar had also began rallying since mid-May on the prospect of further rate hikes, pressuring commodities even more. A stronger dollar impacts the price of dollar-denominated commodities, such as gold, as it takes less of the currency to buy the same amount of gold.

But the dollar plunged following the Fed's comments, and it continued to slide on Friday. The Dollar Index, which tracks the value of the dollar against a basket of key currencies, was recently down 0.7%.