[WM]The Fed raised interest rates for the third time this year on Wednesday.
Spot palladium rose 0.9 percent to $1,075.98 an ounce, a fresh eight-month high.
Gold prices edged higher on Thursday as investors largely discounted a U.S. interest rate hike, but gains were limited as the dollar rose following reports of a row in Italy's new government.
"The fact that the Fed didn't come out as overly hawkish meant there was some positivity felt through emerging market currencies. This may be playing in gold being gingerly bought," said Stephen Innes, APAC trading head at OANDA in Singapore.
"We are still big sellers towards $1,200 an ounce and buyers towards $1,190 ... Bargain hunting is definitely coming to the equation at the lower end of the scale."
MSCI's index for emerging market currencies edged up 0.2 percent on Thursday.
"The Fed statement did not have much of an impact on the dollar and so we would venture to guess that the greenback could resume a little lower over the course of the next week or two, possibly giving gold an element of support," INTL FCStone analyst Edward Meir said in a note.
However, there is little evidence that gold's tight trading range will change anytime soon, Meir added.
The dollar index gained against a basket of six major currencies, supported by a dip in the euro after Italian daily La Stampa said Economy Minister Giovanni Tria "was ready to leave", before a spokeswoman for the ministry dismissed the report.
"There has been some physical demand below $1,200, which is supporting gold," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
Among other precious metals, spot palladium rose 0.9 percent to $1,075.98 an ounce, a fresh eight-month high.
Silver climbed 0.8 percent to $14.40 an ounce and platinum gained 0.9 percent to $828.30 per ounce.