2018.01.0301:08:00UTC+00Gold Prices Notch 3-½-Month Peaks before Edging Down as Dollar Climbs

Gold prices slip on Wednesday after notching a 3-½-month peak, while the dollar eased from its lows and technical indicators pointed to a short-term correction.

Spot gold lost 0.4 percent at $1,312.71 per ounce. The yellow metal previously reached $1,321.33, its strongest level since Sept. 15.

U.S. gold futures were flat at $1,315.60 per ounce.

The 14-day relative strength index (RSI) for spot gold hit 75 on Tuesday, its highest since September 2017. An RSI above 70 indicates a commodity is overbought and might lead to a price correction.

The dollar index rose 0.1 percent to 91.946 after dropping to over a three-month low on Tuesday.

According to analysts, the yellow metal's medium-term outlook appears positive.

Holdings of SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, was down 0.14 percent to 836.32 tonnes on Tuesday from 837.50 tonnes on Friday.

Among other precious metals, palladium dropped 0.6 percent to $1,086.30 per ounce, after notching a record peak on Tuesday at $1,096.50. The metal, which jumped 57 percent last year, has been soaring on fears of short supplies.

Silver dropped 0.5 percent at $17.10 per ounce, after reaching a six week peak at $17.21 earlier in the session. Platinum was down 0.8 percent to $935.74 per ounce.