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Gold edged higher on Wednesday as the U.S. dollar retreated, with markets waiting for minutes from the September Federal Reserve policy meeting for more clues on any interest rate hikes this year.

Traders have priced in a 70-percent chance that the Fed will raise rates at its Dec. 13-14 meeting.

Investors will continue to eye developments for a potential December FOMC rate hike as well as the race to the U.S. presidency as key market movers in the near term," Alex Thorndike, senior precious metals dealer at MKS PAMP Group, said in a note.

Rising inflation and sagging confidence in the ability of central banks to revive global growth will drive up gold, according to Incrementum AG, which says bullion could climb to a record in the next two years.

Consumer prices are set to rise as oil rebounds, while low or negative interest rates and bond buying by central banks have failed to boost economies, said Ronald Stoeferle, managing partner at the Liechtenstein-based company, which oversees 100 million Swiss francs ($101 million). Incrementum was the top precious metals forecaster last quarter, Bloomberg-compiled data show.

Technical-chart factors, such as activity around the 200-day moving average, and Federal Reserve comments will be among the factors to watch in gold this week, says TD Securities. Gold tumbled last week on market chatter about a potential Federal Reserve rate hike, with profit-taking by technically oriented traders. “Since much of the recent decline in gold has been driven by specs and technicians, and considering that any Fed hike will be more a policy normalization rather than a tightening, gold has a chance to return to $1,300/oz,”

Reference: Bloomberg, Reuters