Gold futures moved higher in early trade Wednesday, tracking a slide in the U.S. dollar.

February gold gained $6.70, or 0.6%, to $1,082.80 an ounce.

The ICE U.S. Dollar Index DXY, -0.73% was 0.6% lower Wednesday, retreating after earlier moves drove the buck higher on expectations of an increase in benchmark interest rates by the Federal Reserve as soon as next week. The Federal Open Market Committee concludes its two-day monetary policy meeting Dec. 16.

A weaker dollar lifts the appeal of dollar-denominated precious metals like gold, making them less expensive to buyers using other monetary units.

After tumbling to a low of $1,046 an ounce in early December, gold prices have held relatively steady in the face of expectations of a rate hike, which can diminish the attractiveness of assets that don’t bear a yield.

A risk of investors covering some of their negative bets against gold might provide a bounce higher, market strategists have said.

Meanwhile, March silver picked up 19 cents, or 1.3%, to trade at $14.31 an ounce, after closing down 1.5% on Tuesday.

Source: MarketWatch