Gold dips on strong dollar; holds losses after Fed minutes

By Clara Denina and Josephine Mason

LONDON/NEW YORK (Reuters) - Gold eased on Wednesday, ending a three-day winning streak, as the dollar and equities strengthened and minutes from the Federal Reserve's policy meeting in December showed the U.S. central bank maintaining the status quo on interest rates.

The minutes contained few surprises, with policy makers pressing ahead with plans to begin raising rates this year after a debate on how to communicate their intentions.

Spot gold was down 0.3 percent at $1,215.93 an ounce at 3:22 p.m. EDT (2022 GMT) after jumping to its highest since Dec. 15 at $1,222.40 in the previous session as equities fell on concerns over Greece's future in the euro zone.

U.S. gold futures for delivery in February fell 0.7 percent to settle at $1,210.7 an ounce.

The Fed minutes were a "non-event," said Tai Wong, director of metals trading at BMO Capital Markets in New York.

"You saw a bit of liquidation this morning ... and then it's been stable for the rest of the day," he said.

Gold's near-term resistance for the closing price is expected at $1,220, while a close above that would shift the focus to further gains, with a target of $1,250, technical analysts at ScotiaMocatta said.

The dollar rose 0.6 percent against a basket of major currencies, trading close to a nine-year peak and making dollar-denominated gold more expensive for holders of other currencies.

The market will now await U.S. payrolls data on Friday for fresh clues on the timing of Fed rate rises.

Gold has benefited from years of increased central bank liquidity and a low rates environment, while higher U.S. rates would encourage investors to put money into riskier assets such as stocks and bonds.

The metal was also undermined by the plunge in oil prices, which reduces gold's appeal as a hedge against oil-led inflation, and recovering stocks after data showing price deflation in the euro zone was seen as likely to trigger a bond-buying scheme by the European Central Bank.

Increasing speculation that Greece might exit the euro zone if a left-wing party that wants to cancel austerity measures wins the Jan. 25 elections could lift demand for gold by investors looking for protection, traders said.

Silver reversed earlier losses to trade up 0.2 percent at $16.65 an ounce, while platinum was up 0.3 percent at $1,227 an ounce and palladium was down 1.4 percent to $795.02 an ounce.

(Additional reporting by A. Ananthalakshmi in Singapore; Editing by Jason Neely, Mark Potter and James Dalgleish)