Commodities: Gold rebounds as investors await latest FOMC minutes

Gold advanced on Tuesday, up from strong support at $1,275 seen two sessions ago, as the US dollar fell 0.13% to 93.955 against a basket of currencies.

The precious metal recovered from a 1.4% drop on Monday to advance 0.41% on Tuesday to $1,282/oz., finding heavy resistance in the $1,283 area, while December gold futures climbed 0.53% to $1,282/oz..

Minutes from the latest FOMC meeting are due to be released on Wednesday at 1900 GMT, which should provide further clues as to the Fed's outlook on future rate hikes.

"The Fed rate hike in December is roughly priced in and unless there are very hawkish minutes, it's more that people are looking for direction about future moves," said Georgette Boelle, a commodity strategist at ABN AMRO.

Gold's safe haven appeal received a boost as political crisis had a firm grip on Germany as German Chancellor Angela Merkel said she would prefer a new election to leading a minority government after talks on forming a three-way coalition failed.

BMI Research lowered its gold price forecast slightly to $1,300/oz. in 2018 and $1,325/oz. in 2019.

In other precious metals, silver was 0.66% firmer at $17.03/oz., platinum traded 1.25% firmer to $935/oz., and palladium was up 1.19% to $1,003/oz..

An industry report said on Tuesday that the global platinum market deficit will rise sharply next year thanks to resurgent demand from the jewellery and industrial sectors and declining production.

In the cryptocurrency market, Bitcoin advanced 0.36% to $8,299, continuing to climb on Monday's rally where CME Group Inc. said that it still plans to launch a futures contract for bitcoin this year.

Bitcoin is notoriously volatile and has risen in price by almost 50 percent in just the last days, prompting multiple warnings of a bubble.

Base metals saw copper advance 1.09% to $6,920/tonne, it's highest level since mid November. Falling stocks in LME-registered warehouses, down more than 25% since mid September to 234,375 tonnes, are a positive, traders said.

Oil prices received a leg up on expectations of an extension next week to OPEC led output cuts, but prices remained under pressure from signs of higher output in the US.

January US crude futures were 0.48% firmer at $56.74/barrel while benchmark brent crude traded 0.18% up to $62.83/barrel.

"Geopolitical tensions in the Middle East and a deteriorating macroeconomic picture in Venezuela will remain supportive of oil prices in the run-up to the November OPEC meeting," said Abhishek Kumar, Senior Energy Analyst at Interfax Energy's Global Gas Analytics in London.

"However, persistently high oil production in the United States will be the predominant bearish factor limiting gains in oil prices," Kumar noted.

The Organisation for Petroleum Exporting Countries (OPEC) is widely expected to extend it's output cut deal beyond its March 2018 expiry date.

"The market is just waiting for confirmation that OPEC wants to move on with the extension," said Ole Hansen, senior manager at Saxo Bank.

In the agriculural market, soybean futures traded flat at $10.02/bushel, while the December corn contract was 0.17% firmer at $3.45/bushel.

On Monday, the US Department of Agriculture (USDA) said the US soybean harvest was 96% complete and the corn harvest was 90% finished. Both figures were 1 percentage point below analyst estimates, but robust progress has been made on the week in both crops.

"The U.S. corn and soybean harvests are approaching their end very rapidly now as the USDA said on Monday and there do not seem to be too many problems being faced," said Graydon Chong, senior commodity analyst with Rabobank. "This is a weakening factor today with large U.S. supplies coming onto the world market."