Gold prices inched lower on Wednesday from a one-week high hit in the previous session, as the dollar regained some ground, making greenback-priced bullion more expensive for overseas buyers.

Spot gold fell 0.2% at $1,814.74 per ounce as of 0330 GMT, after rising more than 1% on Tuesday following a dip in dollar. US gold futures were flat at $1,826.00.

“Gold is seeing a slight pull-back after yesterday’s rally.

The market is very quiet as it has entered the holiday mood,“ said Ajay Kedia, director at Kedia Commodities, Mumbai.

The dollar index edged up 0.1%, after falling in last session, as the yen jumped after the Bank Of Japan stunned markets with a surprise policy tweak.

Last week, Federal Reserve Chair Jerome Powell said the US central bank will deliver more rate hikes next year, even as the economy slips towards a possible recession.

“Rate hikes typically weigh on gold but as we enter into late cycle of Fed tightening, gold can recover, said OCBC FX strategist Christopher Wong.

“However, a more material recovery in prices would require more than just a calibration in Fed tightening, probably need the Fed to pause and perhaps cut rates.”

Gold is seen as an inflation hedge, but higher interest rates raise the opportunity cost of holding bullion.

Gold, silver prices at record peak

On the physical side, the pace of Swiss gold shipments to Asia and the Middle East slackened in November as prices rose, with exports to countries including China and Turkey falling from October’s level, Swiss customs data showed.

Top gold consumer China reported no new COVID-19 deaths for Dec. 20, but the nation’s fatalities were revised to 5,241 after removing one death in Beijing, the National Health Commission said.

Spot silver fell 0.7% to $24.00, platinum lost 0.6% to $1,001.48 and palladium rose 0.3% to $1,737.06.