Spot gold was up 1.2% at $4,312.05 per ounce after hitting a near ​six-week low on Wednesday

Gold climbed more ​than 1% on Thursday as a softer dollar and easing oil prices ‌lent support, while investors assessed the U.S. central bank’s latest rate hike and prospects for further policy tightening.

Spot gold was up 1.2% at $4,312.05 per ounce, as of 0848 GMT, after hitting a near ​six-week low on Wednesday. U.S. gold futures for December delivery were down 0.8% ​to $4,351.

I suspect the market may have gotten itself over positioned on the ⁠expectation of a rate hike, as the likelihood grew. And now that it’s ​happened, those positions are being squared out, said independent analyst Ross Norman.

Meanwhile, the dollar eased ​from a seven-week high, making dollar-priced bullion more affordable for holders of other currencies, while oil prices extended their decline on diminishing fears of supply disruptions.

The U.S. central bank raised rates on Wednesday and flagged more ​hikes in the coming months, with new chief Kevin Warsh joining a unanimous decision ​that effectively acknowledges the Trump administration’s inability so far to control inflation that policymakers worry could worsen.

Although gold ⁠is considered an inflation hedge, a high interest rate environment reduces its appeal by boosting the attractiveness of interest-bearing assets.

The Bank of England looks set to keep rates on hold on Thursday, while the Bank of Japan could raise interest rates to a 31-year high ​on Friday.

The Fed is ​tightening policy at a ⁠time when inflation is being driven primarily by energy prices and supply shocks, meaning higher interest rates could weaken growth without ​quickly resolving all price pressures, said Linh Tran, Market Analyst at ​XS.com.

Tran said: This environment ⁠remains supportive of demand for gold as a hedge, particularly while geopolitical uncertainty persists.