Investing.com - Gold futures traded near a seven-week high on Wednesday, as political uncertainty in Greece and lower oil prices boosted the appeal of the precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery hit a session high of $1,238.90 a troy ounce, the most since October 23, before trading at $1,230.60 during European morning hours, down $1.40, or 0.11%.
A day earlier, gold surged $37.10, or 3.1%, to settle at $1,232.00 an ounce.
Futures were likely to find support at $1,199.50, the low from December 9, and resistance at $1,244.90, the high from October 23.
Also on the Comex, silver futures for March delivery dipped 6.2 cents, or 0.36%, to trade at $17.07 a troy ounce.
Greek stocks and bonds extended heavy losses from the previous session on Wednesday, following a surprise decision by the Greek government to bring forward a parliamentary vote for president to December 17, two months ahead of schedule.
The a move could trigger early elections if Prime Minister Antonis Samaras’ candidate is not chosen, fuelling concerns over the future of the country's international bailout package.
Shares in Athens were down more than 3%, after plunging almost 13% on Tuesday, while the yield on Greece's 10-Year government bond rose above the 8%-level.
Meanwhile, oil prices resumed their decline on Wednesday to trade near five-year lows amid ongoing concerns over ample global supplies.
London-traded Brent prices declined $1.16, or 1.73%, to trade at $65.69 a barrel, while Nymex oil futures dropped $1.13, or 1.77%, to hit $62.69.
Despite recent gains, gold prices are likely to remain vulnerable in the near-term amid indications a strengthening U.S. economic recovery will force the Federal Reserve 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 declined 2.4 cents, or 0.83%, to trade at $2.903 a pound, after data showed that Chinese inflation for November slowed to a five-year low of 1.4% from 1.6% in October.
The producer price index fell by a more-than-expected 2.7% last month, underling concerns over a slowdown in the world's second largest economy.
The disappointing data added to fears that China will miss its annual growth target of 7.5% and boosted speculation that the government will need to roll out fresh stimulus measures to avert a sharper slowdown.