Gold futures climbed back above $600 an ounce in electronic trade Thursday, after the Federal Reserve raised interest rates by a quarter percentage point as expected and came across as less hawkish than anticipated, sending the dollar sharply lower

Gold for August delivery touched a high of $602.90 an ounce in late afternoon trade, breaking through $600 for the first time since June. Earlier, it had closed official trade up $7.90 at $588.90 on the New York Mercantile Exchange.

Other metals prices were mixed. July silver closed up 17.8 cents at $10.333 an ounce, July platinum closed up $27.50 at $1,205.7 an ounce and September palladium ended up 60 cents at $313.40 an ounce. July copper edged up 13 cents at $3.423 a pound.
Fed less hawkish than expected

The Federal Open Market Committee raised interest rates by 25 basis points to 5.25%, the highest level since March 2001. "Some inflation risks remain," the committee said in a statement, which analysts viewed as less hawkish than expected.

"The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information," the committee said.

"The quarter-point interest rate raise by the Fed and its softer-tone policy statement have removed any fears that gold would be strangled by sharply higher interest rates and the U.S. dollar," said Peter Grandich, editor of The Grandich Letter.

A more aggressive move, "would be bearish for the price of gold," said Amaury Conti, equity trader at Austin Calvert-Flavin. "The Fed is still looking at a lot of data and people will continue to discuss what the Fed will do over the next couple of weeks."

For now, "$600 may be the top of the trading range," Conti said, adding that the positive trends in metals of the last few days will most likely continue given rising oil prices and the weakness of the dollar.

The dollar plunged to one-week lows against the euro and yen right after the Federal Reserve decision, prompting speculations by analysts about a possible surge in gold prices.

With Tuesday's $599 price now breached, "there's a decent chance that the rally can continue right up to major resistance at 609.40, which is the 100-day moving average," said Dale F. Doelling, chief market technician at Trends In Commodities.

However, "if gold is going to test that resistance level, it will take some serious fund buying along with continued dollar weakness, which just hasn't been evident of late."

In another development that strengthened gold, crude oil futures hit a three-week high above $73 a barrel Thursday after Energy Department data indicated the largest weekly drop in crude supplies since last November. The drop was attributed mostly to the shutdown of a key Louisiana channel and the resulting decline in production at four local refineries.

Crude for August delivery was last trading up $1.16, or 1.6%, at $73.35 a barrel.

On the supply side, gold inventories were unchanged at 8.03 million troy ounces as of late Wednesday, according to Nymex data. Silver supplies fell by 68,563 troy ounces to 102.7 million and copper inventories were flat at 8, 174 short tons.

Metals trading on NYMEX will close early Friday and will remain closed on both Monday and Tuesday. On Friday, aluminium and palladium will close at 12 noon Eastern, copper and silver at 12:05 p.m., and platinum and gold at 12:10 p.m.