Money and Metals

Bloomberg looks at the market reaction to the Fed decision. "The dollar fell by the most in two months against the yen after the Federal Reserve raised the overnight lending rate between banks a quarter-percentage point and suggested it may pause in its rate boosts. 'An August rate hike is in question now,' said Robert Sinche, head of global currency strategy at Bank of America Corp. in New York. 'Reduced expectations for further rate increases brought down the dollar.'"

"The dollar dropped 1.2 percent to 115.07 yen at 4:01 p.m. in New York, and is down from a two-month high of 116.70 on June 27. The dollar weakened to $1.2648 per euro, from $1.2557 yesterday, the biggest drop since June 2. It has fallen from a two-month high of $1.2479 on June 23. The dollar also sank against the British pound and Canadian dollar."

"'We have the Federal Reserve talking down growth whereas in other economies they have said very different things,' said Peter Frank, senior currency strategist at ABN Amro Inc. in Chicago. 'That's very negative for the U.S. dollar.'"

"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. Silver closed up 17.8 cents at $10.333 an ounce, platinum closed up $27.50 at $1,205.7 an ounce and palladium ended up 60 cents at $313.40 an ounce."

"'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."

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