Gold moves off 10-month lows, but upside limited

Gold prices recovered from 10-month lows scored on Thursday as dollar’s rally tempered on Friday, although the upside potential remains limited following Fed’s decision to raise interest rates this week.

Spot gold rose 0.3% to $1,131.65 an ounce, off Thursday’s 10-month trough of $1,122.63/oz.

However, the yellow metal remains on track to post its sixth weekly loss in a row, weighed by prospects of faster pace of tightening by the Fed, which was somehow reassured on Wednesday as the dot plot showed most members expect three quarter-point hikes next year, from two estimated in September.

Higher US interest rates tend to lift the greenback, which puts pressure on commodities. In addition, non-yielding assets like gold lose their appeal as interest rates increase.