LONDON: Gold rose on Thursday, snapping two days of losses, as the dollar softened ahead of the Christmas holiday break, and a recovery in oil prices helped sentiment.

Spot gold rose 0.4 percent to $1,074.70 an ounce by 1500 GMT, after losing 0.7 percent in the last two sessions.

US gold futures for February delivery rose $5.90 to $1,074.20 an ounce.

Many financial centers will shut early on Thursday and stay closed on Friday for the Christmas holiday. Some will remain shut on Monday.

Bullion prices have shed 9 percent so far this year, a third year of losses, mostly due to expectations the US Federal Reserve would raise interest rates, which it did this month.

Silver rose 0.4 percent to $14.33 an ounce, while palladium gained 0.7 percent to $558.65 and platinum was up 1.1 percent at $877.35.

“Leading into this rate hike, there was a lot of negative sentiment but now that’s rebalancing, which is price supportive in the short term,” Julius Baer analyst Warren Kreyzig said.

“But when people start to focus on the fundamentals of low inflation, economic growth in the US, the impact on gold will be bearish again,” Kreyzig added.

With the first US rate increase in nearly a decade out of the way, the focus is now on the pace of future hikes, analysts said.

Higher rates dent demand for non-interest paying gold, for which the outlook remains largely on the downside, with many predicting a drop below $1,000 by the end of next year.

The dollar slipped 0.3 percent against a basket of leading currencies, down for a fourth session out of five.

Data on Thursday showed US weekly jobless claims slipped more than forecast near a 42-year low.