Gold steadied on Wednesday, supported by softness in the dollar and European shares, but investors remained cautious ahead of an anticipated Federal Reserve rate rise next week.
The U.S. central bank is widely expected to raise interest rates for the first time in nearly a decade at its next policy meeting on Dec. 15-16.
Higher rates should dent demand for non-interest-paying gold, which has already lost 9 percent of its value this year and is on track for its third year of losses.
Spot gold rose 0.3 percent to $1,077.91 an ounce by 1107 GMT. The metal is about $30 higher than a near-six-year low reached last week.
“There is not going to be any surprise at the next Fed policy meeting … everybody is expecting a rate hike,” Citi strategist David Wilson said.
“We are expecting continued downward pressure for gold next year depending on whether the market begins to price in more rate hikes or not, as the dollar is going to moderately rise.”
The dollar slipped for a second day against other major currencies on Wednesday, after climbing to a 12-1/2 year high last week.
The slide in commodity prices, particularly crude oil, is also capping gold’s upside. Crude has fallen to its lowest in nearly seven years as OPEC continues to pump near-record amounts of oil to defend market share.