Gold edged lower on Friday, struggling with the $1,200 an ounce mark as the dollar firmed and investor appetite for risk increased on expectations of rising U.S. interest rates.
Spot gold was down 0.1 percent at $1,196.60 an ounce by 1512 GMT. The metal was heading for a 2 percent weekly fall after two weeks of gains.
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U.S. gold futures for delivery in February gained 0.2 percent to $1,196.80 an ounce.
The Fed, after wrapping up a two-day meeting on Wednesday, signaled it was on track to increase rates next year but said it was taking a patient stance, keeping gold's losses in check.
Higher interest rates would hurt non-interest-bearing bullion, which was boosted by central bank liquidity and a low interest rate environment in the years following the 2008 financial crisis.
"It was surprising to see that gold didn't fall sharply after the Fed's meeting, given the strength in the dollar," Commerzbank analyst Carsten Fritsch said.
"We expect some pressure on the gold price in the first half of the year, with prices around $1,100 an ounce due to the effect of higher U.S. interest rates, possibly in the second quarter, falling inflation expectations, lower oil prices and weak economic conditions outside the U.S.," he added.
The Fed's no-rush stance to withdraw stimulus from the U.S. economy sent European and U.S. shares up, after Asian stocks enjoyed their best day in 15 months.
The dollar rose 0.2 percent versus a basket of leading currencies, while the safe-haven yen fell on expectations of further stimulus next year to bolster Japanese inflation. Benchmark Brent crude oil futures rose around 1.5 percent. Gold is usually seen as a hedge against oil-led inflation.
In India, gold importers are offering a discount of $2 an ounce versus London prices for the first time in almost five months due to excess market supply.
Importers generally charge a premium over London prices but demand in the world's second-biggest gold consumer is expected to fall sharply this month after shipments surged in the past three months.
Among other precious metals, silver rose 0.8 percent to $15.95 an ounce. Platinum was unchanged at $1,194.24 an ounce and palladium gained 0.7 percent at $793.55 an ounce. (Additional reporting by Manolo Serapio Jr. in Singapore; Editing by David Evans and Mark Potter)