LONDON – Gold edged higher on Friday, recovering from its biggest daily loss in five months as stocks and the dollar retreated, but remained near multi-year lows after the U.S. Federal Reserve lifted interest rates for the first time in nearly a decade.
The metal has recovered some lost ground after bottoming out on Thursday at $1,047.25 an ounce, within a few dollars of a near six-year low reached on Dec. 3.
Spot gold was up 0.3 percent at $1,055.70 an ounce at 1033 GMT, while U.S. gold futures for February delivery were up $5.70 an ounce at $1,055.30.
The rate hike sparked a surge in the dollar and global stocks on Thursday, but led to a 2 percent slide in gold. Rising rates lift the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
Gold has tumbled 11 percent this year as investors awaited the rate rise. Now that it is out of the way, attention is turning to the pace of further increases.
“Hiking cycles aren’t always bearish for gold. The data is pretty mixed historically,” Macquarie analyst Matthew Turner said.
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