Gold price edges back from 1-week high as dollar recovers

New York (Dec 14)  Gold pulled back from a one-week high on Thursday when the dollar recovered after tumbling a day earlier following the U.S. Federal Reserve's decision on interest rates.

The Fed raised benchmark rates for the third time this year as widely expected, but maintained its outlook of three rate increases in 2018 on low inflation concerns.            

The dollar slid on Wednesday as the Fed kept its outlook on interest rates unchanged, but recovered and held steady on
Thursday. Gold was likely to hold up well in the short term, although there were risks that bullion could revisit the bottom of its range close to $1,200, said Jonathan Butler, commodities analyst at Mitsubishi in London.
    "There's still some supportive factors going towards the
year end. We've got a great deal of uncertainty over U.S. tax
reform, the U.S. debt ceiling and potentially government
funding," he said.
    "But if U.S. stock markets continue to fly, if we continue
to see flows into some of the more unconventional assets
including crypto currencies, then that would erode some of the
investor interest in gold as a safe haven and alternative
asset."
    Spot gold  had edged up 0.1 percent to $1,256.25 an
ounce by 1100 GMT after earlier touching its highest since Dec.
7 at $1,259.11.
    U.S. gold futures rose 0.8 percent at $1,258.50.
    Meanwhile, the European Central Bank is likely to bump up
some of its economic forecasts on Thursday and may debate
tweaking its pledge to keep money at its current, ultra-easy
level, but will ultimately reaffirm is policy stance.
                 
    "People factor too much hawkishness into these meetings and
it disappoints a bit and that's kind of what happened ... the
nervousness in the market helped gold," a Hong Kong-based trader
said.
    Platinum failed to react much to news that South African
precious metals miner Sibanye-Stillwater agreed to buy
Lonmin, the world's third biggest platinum producer.
    "It makes for a good match, but it doesn't resolve
oversupply of the PGM (platinum group metals) industry," said
Nedbank precious metals analyst Leon Esterhuizen.
    Platinum dipped 0.2 percent to $882.85 an ounce. On
Tuesday, it touched its lowest since February, 2016. Palladium
       shed 0.6 percent to $1,010 an ounce.
    Silver fell 0.6 percent to $15.97 an ounce, after
hitting a five-month low of $15.59 in the previous session.