Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold gained 1.4% to close above $1,076, and then held most of those gains after the Federal Reserve, as expected, raised interest rates for the first time in nine years.

In what analysts call the most dovish rate hike in history, the central bank raised the fed-funds rate by a minimal quarter-point, lifting it off zero for the first time since 2008. The statement accompanying the Fed's decision was intentionally crafted with language intended to soften the blow, repeating several times that the pace of future hikes will be "gradual."

While the committee signaled confidence in the direction of the economy, it acknowledged that inflation, which remains below targets, must be carefully monitored before the next rate increase. The committee also slightly adjusted its so-called "dot plot" of future hikes to reflect a more gradual tightening cycle.

After closing with strong gains in the regular trading session, gold knee-jerked down to $1,067 in electronic trade when the new rate was announced. But as traders digested the Fed's dovish statement, gold retraced most of that drop, rising as high as $1,073. The dollar fell immediately after the announcement, supporting gold and other commodities denominated in it for international trade.

U.S. and global equities rallied, with the Dow and Global Dow both adding around 1.5%, as investors latched onto the Fed's intention to keep monetary policy highly accommodative for the foreseeable future.

The other precious metals also gained, with silver surging 3.5% while platinum and palladium added 2.4% and 0.9%, respectively.

At the Comex close: February gold gained $15.20 to $1,076.80; March silver surged 48 cents to $14.25; January platinum jumped $20.20 to $876; and March palladium picked up $5, to $571.95 an ounce.