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.

But after Fed officials made hawkish comments in May, the central bank's latest comments seemed to assuage those concerns.

"People are reading into this that the Fed will take a pause, which would mean that the dollar's

recent rally is close to an end, and that would be good for the price of gold," Conti says.

A weakening dollar boosts the price of dollar-denominated commodities, such as gold, as it takes more of the currency to buy the same amount of gold.

The dollar was recently sharply lower against the yen and also fell vs. the euro.

Gold bugs have been hoping that the dollar will resume a multi-year decline when the Fed stops raising rates and currency markets turn their attention to the swelling U.S. deficits.

Some observers say the Fed is pressured to support the dollar, as a sharp drop in the U.S. currency would heighten inflationary pressures, boost interest rates and likely accelerate a slowdown in the economy.

At the same time, many central banks around the world are also raising interest rates, reducing the yield-advantage of dollar investments.

"A global trend toward tightening in Asia and Europe has put pressure on the Fed to support the dollar with higher interest rates," writes Rick Ackerman, an investment advisor and editor of the

Rick's Picks

newsletter.

"It couldn't happen at a worse time for the U.S., since housing bubbles are starting to deflate around the country even as real wage growth continues to stagnate amidst rising consumer prices," he adds.

While some uncertainty persists about monetary policy, some cautiousness might persist in the commodities markets. "I'm not convinced that gold will start to rally right away," says Conti. "There isn't such a big, big change, in terms of the economic outlook."

Conti says he might feel more comfortable about a gold rally in early August, after the next Fed meeting. July is also traditionally quiet for gold demand, while by August, "we'll be going into the fall when there's more jewelry buying."

Gold, which acts as a hedge against inflation, had also received an early lift as crude oil topped $73 a barrel. In recent action, crude oil was adding $1.33 to $73.55 a barrel after a government report showed declining gasoline inventories.

Among the biggest gainers in metals-mining shares,

Agnico Eagle Mines

(AEM) - Get Report

was up 9.4%,

Freeport McMoRan

(FCX) - Get Report

was up 8.2% and

Eldorado Gold

(EGO) - Get Report

was up 7.2%.

Golden Star Resources

(GSS) - Get Report

was up 8% after reporting "positive progress" in a sulfide project at its Bogoso/Prestea mine in Ghana.

The newly launched

Market Vectors-Gold Miners

(GDX) - Get Report

exchange-traded fund, which tracks the performance of the Amex Gold Miners Index, was up 6.7%.

ETFs tracking the metals themselves were also rallying. The

iShares Silver Trust

(SLV) - Get Report

was recently up 5%, while the

StreetTRACKS Gold Trust

(GLD) - Get Report

was up 3.8%.