Gold prices ticked higher on Monday as a tepid dollar made bullion less expensive for overseas buyers, although the prospects of further interest rate hikes by the US Federal Reserve next year kept gains in check.

Spot gold was up 0.1% at $1,794.60 per ounce, as of 0226 GMT. US gold futures rose 0.2% at $1,804.00.

The dollar index slipped 0.1%. Gold prices attempted to recoup losses, considering that despite the hawkish takeaway from the Fed, upside reaction in the dollar and yields still seem more measured, said IG Market strategist Yeap Jun Rong.

Bullion registered its biggest weekly decline since mid-November on Friday after Fed Chair Jerome Powell said the U.S. central bank would deliver more hikes next year, despite growing recession worries.

Fed policymakers may need to lift US borrowing costs above the peak 5.1%, and keep them there perhaps into 2024 to squeeze high inflation out of the economy, three of them signalled on Friday.

Gold is considered a hedge against inflation and economic uncertainties, but rising interest rates tend to dent bullion’s appeal as the metal pays no interest.

While gold is perceived as a safe-haven asset, there are instances where prices seem detached from the safe-haven status, when factors such as Fed policies comes into play, Yeap said.

“Further hawkish push back from Fed officials may pose a struggle for gold.”

China’s business confidence hit its lowest since at least January 2013, a survey by World Economics showed, reflecting the impact of surging COVID-19 cases on economic activity and hinting at possible recession next year.

Spot silver gained 0.3% to $23.29, platinum rose 0.5% to $996.36 and palladium was up 0.7% at $1,726.20.