* Fed lifts target interest rate to 3.00%-3.25% range
    * Silver up as much as 3%

 
    By Kavya Guduru
    Sept 21 (Reuters) - Gold prices rebounded on Wednesday as
Treasury yields retreated after the U.S. Federal Reserve hiked
interest rates by an expected 75 basis points.
    Spot gold        was 0.7% higher at $1,673.86 per ounce by
4:12 p.m. EDT (2011 GMT), rising over 1% earlier.
    U.S. gold futures        settled up 0.3% at $1,675.70. 
    The Federal Reserve raised its target interest rate by
three-quarters of a percentage point, and signalled more
increases.                           
    "The (gold) market quickly realized that the rate hikes and
more importantly, the expected path of rate hikes was
well-factored into market prices... we subsequently have seen a
significant bounce back off those lows," said David Meger,
director of metals trading at High Ridge Futures.
    Prices, which were hovering near their lowest in over two
years, initially moved lower after the statement but swiftly
reversed course to climb over 1%.
    Bullion's gains came despite a stronger dollar       , 
while benchmark 10-year U.S. Treasury yields            
retraced from their highs.             
    "The move lower in yields has supported the bounce in gold
post FOMC meeting," Standard Chartered analyst Suki Cooper said.
    "It is possible we could see some short covering activity
amid a relief rally, but the hawkish commentary is set to keep
gold prices on their longer term downtrend," Cooper added.
    The Fed's new projections showed policy rate rising to 4.4%
by the end of this year, and to 4.6% in 2023.             
            
    Rate hikes to fight soaring inflation tend to raise the
opportunity cost of holding zero-yield bullion.
    "While price action could indicate that gold may have
established a short term bottom at $1,655, the upside will
remain a challenge given a clear message from the Fed that rate
hikes are emphatically not done," said Tai Wong, a senior trader
at Heraeus Precious Metals in New York.
    Latching on to gold's run, spot silver        gained 1.4% to
$19.57 per ounce.
    Platinum        lost 1.6% to $907.79 and palladium       
fell 1.1% to $2,143.82.

 (Reporting by Kavya Guduru in Bengaluru; Editing by Shailesh
Kuber)