Gold rises, but gains limited by Fed concerns

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Gold partially recovered from a three-week low hit on Wednesday, but remained under pressure on prospect that the U.S. Federal Reserve could start to rein in its stimulus program as soon as next month.

Bullion has lost around 25 percent of its value this year, after 12 annual gains, on fears the Fed will curb its $85 billion monthly bond purchases on signs of economic recovery.

The U.S. central bank's tapering would support a higher interest rate environment that diminishes gold's attractiveness.

Spot gold was up 0.4 percent to $1,286 an ounce, having hit its lowest level since July 17 at $1,272.64 earlier in the session.

U.S. gold futures for December settled 0.2 percent higher at $1,285.30 an ounce.

Traders said there was some buying of the precious metal from those who had agreed to sell at future dates.

The dollar stood around a one-week low hit earlier, while European and U.S. shares fell.

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