Gold rose for a ninth consecutive session Wednesday, settling at its highest since the middle of September, with haven demand for the precious metal supporting prices even as a bruised dollar strengthened.
Prices, however, retreated in electronic trading after the release of minutes from the U.S. Federal Reserve's December monetary policy meeting.
February gold GCG8, -0.64% rose $2.40, or 0.2%, to settle at $1,318.50 an ounce. Futures prices logged their highest settlement since Sept. 15, according to FactSet data. The ninth-consecutive session of gains was the longest such streak of gains since February 2014.
In electronic trading, prices pulled back to $1,310.10 less than half an hour after the Fed minutes, which revealed a sharp divide among officials over the central bank's forecast for three interest-rate hikes this year.
"The lack of a more-solid lean toward the dovish end of the spectrum, and the lack of an immediately bullish response in gold, prompted investors to take profits after the yellow metal's recent impressive gains," Brien Lundin, editor of Gold Newsletter, told MarketWatch.
The ICE U.S. Dollar Index DXY, +0.06% was little changed rose after Fed minutes, up 0.4%, attempting to rebound from a more-than three-month low reached a day earlier.
Expectations of higher U.S. interest rates later this year and the passage of the Republican tax bill have failed to give the dollar a lift, helping gold, in part because traders wonder how much the tax reforms will actually boost the economy. A weaker dollar tends to provide a boost to dollar-pegged commodities, including gold, making them more attractive to users of weaker monetary units.
Read: 7 reasons why investors should go for gold in 2018
According to the CME Group's data, the market is currently pricing in the next rate rise in March.
Meanwhile, geopolitical uncertainty has helped to prop up gold prices. In Iran, antigovernment demonstrators have taken to the streets in cities across the country over the past week to express anger over the country's economic woes. Progovernment demonstrations picked up on Wednesday.
The protests, which have left more than 20 people dead, boost the appeal of gold as a haven asset. They've also reignited a geopolitical risk premium in oil marketsCLG8, +0.28% amid concerns the civil unrest could result in crude supply disruptions.
Read: Iran state TV highlights pro-government rallies after days of unrest
"At the beginning of 2018 we see no reason why this underlying [gold] demand should not continue," said Ole Hansen, head of commodity strategy at Saxo Bank, in a commentary. "The dollar could face further weakness, stocks are elevated and bond yieldsTMUBMUSD10Y, +0.41% are low and with that comes the risk of corrections. One of gold's best friends-Donald Trump-continues to preside over an unpredictable U.S. administration while emerging inflation is likely to add an additional layer of support."
Despite the gains in gold, the exchange-traded SPDR Gold Trust GLD, -0.26% slipped 0.7% after rising 1.2% on Tuesday, while the VanEck Vectors Gold Miners ETF GDX, -1.05% was down 2.2% after rising 2.5% Tuesday.
Among U.S. economic data Wednesday, the Institute for Supply Management said its manufacturing index rose to 59.7% in December-the second highest reading of the year.
Meanwhile, March copper HGH8, -0.17% lost 0.6% to $3.258 a pound and March silver SIH8, -0.88% added 0.4% to $17.267 an ounce.
March palladium PAH8, -0.55% slipped 0.4% to $1,083.35 an ounce after a rise of more than 50% for futures prices in 2017. April platinum PLJ8, -1.01% added 1.5% to $962.30 an ounce.
Read: How palladium and lumber defied the 2017 commodity slump