BENGALURU (Jan 18): Gold prices on Wednesday hovered below eight-week highs hit in the previous session, as uncertainty over U.S. President-elect Donald Trump's economic plans and his comments on strong greenback caused the dollar to decline.

Spot gold was firm at US$1,216 per ounce by 0322 GMT.

Bullion hit an eight-week high of US$1,218.64 in the previous session.

U.S. gold futures were up 0.2% at US$1,215.60 per ounce.

In an article in the Wall Street Journal late Monday, Trump said the strength of the U.S. dollar against China's yuan "is killing us". 

"What's really given an extra boost for gold is Trump's comments...and some risk aversion sentiments due to Brexit moves," said Jeffrey Halley, senior market analyst at brokerage OANDA in Singapore.

"The next resistance level is around US$1,240 and there is a possibility that we can run up to US$1,230 until Friday. But, don't see gold going above that over the next couple of months," he said.

Britain will quit the EU single market when it leaves the European Union, Prime Minister Theresa May said on Tuesday in a decisive speech that set a course for a clean break with the world's largest trading bloc. 

"Once Trump takes office and there is some clarity, the focus will come back to the fact Fed is going to hike rates a number of times this year. That would reduce the appeal of gold as an asset," Halley said.

San Francisco Federal Reserve Bank President John Williams on Tuesday called for gradual U.S. interest-rate hikes over the next few years to keep the economy from overheating and ultimately falling into recession. 

Fed Governor Lael Brainard, a leading Federal Reserve proponent of low interest rates, said on Tuesday the U.S. central bank might hike rates more aggressively if deficit spending under the Trump administration produced a quick economic boost. 

Fed Chair Janet Yellen will have an opportunity to lay out her thinking with speeches on monetary policy on both Wednesday and Thursday this week.

Higher interest rates would reduce demand for non-interest bearing bullion holdings. 

Trump's campaign calls for tax cuts and more infrastructure spending have boosted U.S. shares and the dollar, as well as driving a selloff in Treasuries, but his protectionist statements and a flurry of off-the-cuff Tweets have kept many investors from adding to risky positions, instead opting for gold.

Gold, considered a safe-haven investment during times of geopolitical and financial uncertainty, has risen over 8% since dropping to a more than 10-1/2-month-low in December.

Spot silver was little changed at US$17.16 an ounce, after hitting an over one-month high of US$17.20. 

Platinum rose 0.4% to US$977.90 an ounce, while palladium rose 0.5% to US$751.30.