Gold jumps to the highest level since Dec. 9

Gold extended remained well bid for the second consecutive session in the new-year and has now touched a fresh multi-week high level of $1168.

A broad based greenback retracement, with the key US Dollar Index flirting with session low near 103.00 mark, is seen lending support to the precious metal on Wednesday. Moreover, a mildly cautious sentiment around European equity markets is further boosting demand for traditional safe-haven assets and lifted the yellow metal to its highest level since December 9. 

On Wednesday, minutes from the Federal Reserve's monetary policy meeting on December 13-14 would provide further clues over the pace of Fed rate-hikes in 2017 and could turn out to be a key driver of the greenback's near-term trajectory, eventually providing fresh impetus to dollar-denominated commodities - like gold. 

In the accompanying Fed monetary policy statement forecasted three rate-hikes in 2017 and today's minutes would also provide a detailed look at the debate among policymaker and the reasons for their hawkish projection for 2017. Should the minutes reveal prospects of faster US economic growth, it would reinforce market expectations of tighter Fed monetary policy stance and eventually attract fresh selling interest around the non-yielding yellow metal. 

Technical levels to watch

From current levels, the ongoing recovery trend is likely to confront resistance near $1170 level above which the commodity seems all set to head towards testing its next major resistance near $1183-85 region. Alternatively, reversal from current resistance area, and a subsequent drop below $1160-58 immediate support, is likely to drag the metal back towards $1150 support area.