Gold prices inched higher on Tuesday, with investors waiting for minutes from the US Federal Reserve's last meeting for clues on the outlook for potential rate rises. The minutes of the meeting, when it kept interest rates unchanged, will be released on Wednesday. Spot gold was up 0.3 percent at $1,280.46 per ounce, as of 0840 GMT. The metal fell about 1.4 percent on Monday in its biggest one-day percentage drop since September 11.
US gold futures for December delivery gained 0.4 percent to $1,280.10. "Given the fact that the December rate hike is almost a done deal, market watchers will look more closely at what is the Fed rhetoric for post-December," said OCBC analyst Barnabas Gan. Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.
Spot gold may break support at $1,274 per ounce, and fall towards the October 6 low of $1,260.16, according to Reuters technical analyst Wang Tao.
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