* Gold hit session highs on weak dollar after Fed minutes
* New-year flows into commodities support gold
* Auto sales recover in December after weak 2009; PGMs up
(Recasts, updates comments, closing prices, market
activity, adds NEW YORK to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Jan 6 (Reuters) - Gold prices scaled a
three-week high on Wednesday as fresh new year investment flows
boosted commodities, and as the dollar weakened due to renewed
economic worries.
Bullion rose to session highs above $1,140 an ounce as the
dollar broadly fell after minutes from U.S. Federal Reserve's
latest meeting showed members worried about the winding down of
the central bank's massive purchase of mortgage securities to
boost the nascent economic recovery. []
Spot gold <XAU=> was at $1,138.90 an ounce at 2:49 p.m. EST
(1949 GMT), against $1,118.10 late in New York on Tuesday.
Bullion hit a high of 1,140.10, a level not seen since Dec.
17.
U.S. February gold <GCG0> settled up $17.80, or 1.6
percent, at $1,136.50 an ounce on the COMEX division of the
NYMEX.
Better physical demand from top bullion consumer India and
bullish investor demand lifted prices, and the yellow metal is
being caught up in positive sentiment towards commodities,
analysts said.
"(This is) a commodity story really, and gold is benefiting
from that," said Simon Weeks, head of precious metals at the
Bank of Nova Scotia.
Earlier in the session, the metal was supported by dollar
weakness after data showed the U.S. services sector grew at a
very marginal pace in December, with employment in the sector
lagging. [] []
Trading was cautious ahead of key U.S. non-farm payrolls
data for December on Friday, as investors await evidence of how
the economy is faring.
"The market may have already priced in expectations that
the payrolls report could be a strong number, showing some
signs of growth," said Tom Pawlicki, precious metals and energy
analyst at MF Global.
The payrolls data is expected to shape expectations for
when the Federal Reserve will start tightening its ultra-loose
monetary policy and determine the direction of the dollar.
"We have an attractive interest rate environment for gold,
and investment inflows into commodities are supporting gold
prices," said Commerzbank analyst Eugen Weinberg.
TECHNICAL INDICATORS
From a technical perspective, gold is poised for further
gains, said analysts who study past price movements for clues
as to future trading patterns.
"With net speculative length having unwound from recent
extremes, the near-term prospects for gold have improved," said
technical analysts at Barclays Capital.
If near-term resistance is confirmed, gold could push back
towards the top end of its current range at $1,200 an ounce,
they said, close to the record high of $1,226.10 an ounce it
reached in December.
Among other precious metals, silver <XAG=> was at $18.18 an
ounce against $17.76, while palladium <XPD=> was at $424.50 an
ounce against $418. Platinum <XPT=> hit $1,561, its highest
since August 2008, and was later at $1,553.50 an ounce against
$1,528.50.
Platinum group metals traders welcomed news that U.S. auto
sales hit 11.25 million in December, the fourth consecutive
month of improvement after a weak year. Carmakers account for
more than half of platinum consumption. []
(Additional reporting by Maytaal Angel in London; Editing by
Marguerita Choy)
