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Gold prices inched up on Tuesday as bargain-hunters moved in after prices touched their lowest in 10months the session before, but a possible US rate hike as early as next week capped gains.

“With a Fed rate hike approaching, the whole market is just waiting for that,” said Jiang Shu, chief analyst at Shandong Gold Group. Shu said gold was seeing some support from buying by Chinese jewellery makers ahead of an early Spring festival next year.

Spot gold was up 0.2% at $1,172.30 an ounce by 04.53 GMT (10.23am). It touched $1,157 an ounce on Monday, its lowest since 5 February.

“Gold will likely remain under pressure going into year-end,” Edward Meir, an analyst with INTL FCStone, said in a note. He pointed to the combined impact of higher rates, a stronger dollar and buoyant US equity markets, coupled with significant exchange-traded fund (ETF) outflows and weaker Indian physical demand.

This is due to the fact that the U.S. economy is growing quite strongly, with third-quarter GDP (gross-domestic-product growth) revised to 3.2% and Q4 looking like it could come close to that mark as well. U.S. inflation is also perking up and so the Fed does not want to fall too far behind the curve, said analyst at INTL FCStone in a monthly commodities outlook.

There are signs of a pickup in physical demand. However, exchange-traded funds posted the largest outflows in November since July 2013, INTL FCStone pointed out. The firm listed a December range for gold of $1,125 to $1,230 an ounce.

Reference: Reuters