Gold futures dip but hold near 3-week high ahead of Fed minutes

Investing.com - Gold futures dipped but held near a three-week high on Wednesday, as investors looked ahead to the minutes of the Federal Reserve’s December meeting, due out later in the day.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery shed $4.50, or 0.37%, to trade at $1,214.90 a troy ounce during European morning hours.

A day earlier, gold hit $1,223.30, the most since December 16, before settling at $1,219.40, up $15.40, or 1.28%, as safe-haven demand was boosted amid growing fears that Greece might exit the euro zone.

Futures were likely to find support at $1,177.80, the low from January 5, and resistance at $1,225.00, the high from December 15.

Also on the Comex, silver futures for March delivery declined 22.7 cents, or 1.36%, to trade at $16.41 a troy ounce.

The Fed was to publish the minutes of its latest policy meeting later Wednesday, which were expected to provide further indications on the future direction of monetary policy.

The U.S. was also to release the ADP report on private sector job creation later in the day, for further indications on the strength of the recovery in the labor market.

Gold lost nearly 2% in 2014 amid indications a strengthening U.S. economic recovery will force the Fed to start raising interest rates sooner and faster than previously thought.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

Elsewhere in metals trading, copper for March delivery dipped 1.2 cents, or 0.42%, to trade at $2.755 a pound.

Meanwhile, oil prices continued to tumble on Wednesday to hit the lowest level since spring 2009, as investors piled on to their short positions in anticipation of lower prices amid lingering concerns over a growing supply glut.

London-traded Brent prices declined $1.08, or 2.11%, to $50.02 a barrel, while Nymex oil futures dropped 83 cents, or 1.74%, to $47.10.

The US dollar index, which measures the greenback against a basket of six major currencies, climbed to a nine-year high, boosted by the diverging policy outlook between the Federal Reserve and central banks in Europe and Japan.