Commodities: Gold loses some shine despite geopolitical risks, US dollar losses

This comes despite several inflationary factors still prevalent in the market; North Korean tensions, a weaker US dollar and Hurricane Irma looking to make landfall in Florida, as well as reduced expectations of a rate hike in the US this year.

"Gold is likely to move higher over the course of September, sustained by a weaker dollar and North Korean tensions...Any further wobbles in US equities could provide further support and perhaps nudge it towards our $1390 price target." said Edward Meir at INTL FCStone.

Elsewhere in precious metals, silver was up 0.34% to $17.95/Oz., platinum was 0.08% higher to $1,008/Oz. and palladium was down to $946/Oz.

Palladium recently hit year highs of just over $1,000/Oz. where offers seem to have kicked in and investors saw a good opportunity to take profits.

In the base metal arena, copper saw some profit taking on Tuesday's european trading session, which saw the metal hit a three year peak. It has since come off those lows to trade 0.77% higher on Wednesday to $6,912/ tonne.

"Yesterday's correction was realistically overdue by a long way with markets like nickel that have rallied almost 30 percent without any major interruptions," said broker Kingdom Futures in a report.

"However ... nothing has changed in the metals world in the last 24 hours, warehouse stocks are still at very low levels ... the global economy is growing across the board and metal consumption will rise as a consequence."

Goldman Sachs said in a report that "momentum and technicals are pointing to further upside risks in copper prices". Chart analysis suggests a target at $7,350 a tonne compared to a fair value of $6,200, it said.

"While we expect copper prices to come down over the next 6-12 months to be in line with fundamentals, they are likely to remain volatile in the near-term," they added.

The oil market was bracing itself for yet another possible disruption to US production as Florida braces itself for Hurricane Irma, rated the most powerful Category 5 storm. Oil terminals and distributors in Florida are tracking the storm, which could curtail fuel shipments to the state, which is largely dependent upon waterborne deliveries of gasoline and diesel.

December WTI (West Texas Intermediate) traded just under 1% higher on the day to $49.98/ barrel and benchmark brent crude for January delivery was up to $53.89/ barrel.

"Everyone is just grappling with the spate of storms that are populating the Gulf," said John Kilduff, a partner at Again Capital.

In other oil related news, production at Libya's Sharara field resumed after an armed group shut down that pipeline for more than two weeks. Sharara had been producing up to about 280,000 barrels per day (bpd) until it was forced to shut on Aug. 19.

Libya is exempt from an OPEC-led pact to curb global oil production and the revival in its output has complicated the bloc's efforts to defend prices.

On the agricultural front, soybean futures for November traded higher on the day to $9.71/ bushel, up 0.27%, March corn was 0.62% higher to $3.731/ bushel and December corn futures were lower to $0.7468/lb.