Gold slipped on Wednesday as the US Federal Reserve signalled that interest rates would stay elevated going into the new year and said it was too soon to consider rate cuts.
"Our focus right now is really on moving our policy stance to one that is restrictive enough to ensure a return of inflation to our 2% goals over time, it's not on rate cuts," Chair Jerome Powell said at the news conference following the Fed's latest policy-setting meeting.
Spot gold edged 0.1% lower to $1,808.09 per ounce, by 3:43 p.m. ET (2043 GMT), after falling as much as 0.8% following the Fed's announcement to raise rates by a widely expected half a percentage point and projection of at least an additional 75 basis points of increase in borrowing costs by the end of 2023.
U.S. gold futures settled 0.4% lower at $1,818.70.
"Gold scoffs at hawkish signals in the dot plot as well as Powell's clear warning that there are no rate cuts priced in 2023 at this time, clawing back all its initial losses," said Tai Wong, a senior trader at Heraeus Precious Metals in New York.
"The weak dollar is certainly helping. The market thinks ultimately the Fed will be a paper tiger and fold as soon as there's a recession or unemployment turns higher," Wong said, adding that it was unclear if gold could rally above this week's $1,824 high.
A lower dollar makes greenback-priced bullion less expensive for overseas buyers.
Gold on Tuesday jumped after data showed a smaller-than-expected rise in U.S. consumer prices, which drove hopes for slower rate hikes, analysts said. Lower rates tend to cut the opportunity cost of holding non-yielding bullion.
Spot silver rose 0.8% to $23.92 per ounce, platinum fell 0.8% to $1,025.05, and palladium lost 0.8% to $1,913.89.