2017.12.1402:34:00UTC+00Gold Prices Rise to 1-Week Peak as Dollar Steady

Gold prices increased to their highest in a week on Thursday, while the dollar was on the defensive after dropping during the previous session following the U.S. Federal Reserve's move to hike rates.

Spot gold climbed 0.2 percent at $1,257.51 per ounce after previously hitting its best since Dec. 7 at $1,259.11.

The spot gold price rallied to $1,256.87 after the Fed hiked its benchmark interest rates by 25 basis points, or a quarter of a percentage point.

U.S. gold futures were almost one percent higher at $1,260.30.

The dollar eased on Thursday after dropping on sluggish U.S. inflation data and as the Fed held its outlook on interest rates unchanged.

The U.S. central bank hiked benchmark rates for the third time in 2017, but maintained its outlook of three rate hikes next year on low inflation concerns.

Traders said inflation fears also supported gold's price, even though inflation data released early in the session was mild.

According to Reuters technical analyst Wang Tao, spot gold might test a resistance at $1,262 an ounce, break above which could lead to a gain to the next resistance at $1,276.

In other precious metals, silver rose 0.2 percent at $16.09 per ounce, after notching a five-month low of $15.59 the session earlier.

Platinum climbed 0.5 percent at $889.20 per ounce. It notched its lowest since February 2016 on Tuesday. Palladium was flat at $1,016.75 per ounce.