Gold climbs over 1% as markets absorb Fed rate hike and oil rally eases

Spot gold advanced more than one percent on Thursday after the U.S. Federal Reserve lifted its benchmark interest rate and hinted at additional hikes later in the year. The rally was driven largely by technical factors, with the Fed's tightening already reflected in market pricing. Meanwhile, oil prices fell, extending the decline from the previous session, after reports that Saudi Arabia would supply extra crude through Oman, reducing fears of a supply shortage.

Kelvin Wong of OANDA said that a continued drop in oil could help gold rise further, though he expects gold to stay range-bound for now. The Fed's decision was unanimous, with new central bank chief Kevin Warsh joining the vote, and most policymakers forecasting at least one more quarter-point hike before year-end. Precious metals other than gold also gained, with silver, platinum and palladium all posting notable increases.