Commodities: Gold higher despite firmer dollar

The dollar index, which tracks the US currency against a basket of six major rivals, added 0.15% to 94.696, though it remained shy of Friday's three-month high of 95.150.

Despite a stronger dollar, gold managed to climb 0.45% to $1,276/oz. with the December contract trading 0.57% higher to $1,278/oz..

While prices have recovered, they remain within a less than $15 an ounce range so far this week as traders await clarity on US monetary policy.

"Coming closer to the end of the year and having two FOMC meetings in a month and half, which could determine the direction of monetary policy, is what has been keeping gold rangebound," Capital Economics analyst Simona Gambarini said.

Gold is highly sensitive to rising U.S. interest rates, as these lift the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

Some bullion market participants have drawn a relationship between the precious metal and Bitcoin, stating that the weakness in the gold price has helped bolster the crypto currency, suggesting that it has cannibalised investor interest.

Bitcoin, which has more than doubled in price since mid September alone, hit another all-time high, hitting $6,591 on the European Bitstamp exchange, boosted by bets that it could enter the financial mainstream after CME Group said it would launch bitcoin futures trading.

Other precious metals saw silver up 2.69% to $17.18/oz., platinum 1.7% higher to $936/oz. and palladium 1.81% firmer at $1,003/oz., it's highest level since mid October.

"While we still see prices detached from fundamentally justified levels, we also believe risks are skewed to the upside," Julius Baer said in a note on Wednesday.

"Hence it is not yet the right time to short the market although we remain convinced about a looming correction."

In the base metals market, copper tracked a stronger dollar higher, up 0.74% to $6,922/tonne, falling from an early morning high of $7,021/tonne.

Copper has risen more than 5 percent this month, benefiting with other commodities from hopes that rising demand from China and the United States would boost prices.

In a note to clients on Tuesday, Oxford Economics analyst Daniel Smith said, "Demand indicators look relatively poor for copper, and I don't see the supply side as being particularly tight," adding, I think it has just been caught up in this macro story about China improving and investors coming into commodities quite generally. I see that as overdone in copper."

Energy markets saw a drop in oil prices on Wednesday with West Texas Intermediate (WTI) for January delivery down 0.05% to$54.55/barrel, and benchmark brent crude 0.46% lower to $60.64/barrel.

the moves lower came after day highs for both grades of $55.42 and $61.75 respectively as well as a decline in crude oil inventories of 2.4 million barrels.

The Organization of the Petroleum Exporting Countries (OPEC) is likely to stay the course by keeping its current curb on oil production in place for the whole of 2018 despite potential output disruptions next year, Gulf OPEC sources said.

"The feeling in OPEC is that $60 (a barrel) should be the floor for oil prices next year," the source said.

Agriculturals saw soybeans for March 2018 delivery up 0.51% to $10.01/bushel while December corn was also higher, up 0.61% to $3.48/bushel as scattered farmer sales of bumper harvests weighed on cash prices for the crops at some locations, grain merchants said.

However, rains this week in many parts of the region slowed harvest, limiting deliveries of freshly harvested supplies and bolstering bids at some elevators and river terminals.