Gold prices took another hit on Tuesday (20 December) after a jump in the value of the dollar hammered the precious metals market.

At 2:47pm GMT, the Comex gold contract for February delivery was down 1.22% or $13.90 as the yellow metal breached $1,130 an ounce to trade at $1,128.80. Spot gold slid even further to $1,127.87 an ounce, down 0.91% or $10.34.

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A marginal recovery either side of the weekend saw the gold regain some ground, but the precious metal has remained under pressure since 14 December, when the US Federal Reserve decided to raise the country's benchmark interest rates by 0.25%.

Furthermore, forward guidance by the Fed pointing to possibly three interest rate hikes over the course of 2017, has resulted in further loss of confidence.

FXTM research analyst Lukman Otunuga said: "The strengthening dollar may become a key theme for the early parts of 2017 consequently capping any extreme upside gains on gold."

Fawad Razaqzada, market analyst at Forex.com, said: "Another day, anther multi-year high for the dollar. This afternoon saw the EUR/USD drop below last week's low to hit its lowest level since 2003. The world's heaviest traded pair has been falling sharply in recent times as disparity between eurozone and US monetary policies grow.

"Whereas the European Central Bank (ECB) has turned even more dovish by expanding its quantitative easing stimulus programme to at least December 2017, the Fed has cut interest rates and has talked up the possibility of three further hikes next year. This is basically the driving force behind the EUR/USD's downward move and will probably remain so in the early parts of next year."

Elsewhere, the Comex silver contract for March delivery was 2.01% or 32 cents lower at $15.77 an ounce, while spot platinum fell to $901.60 an ounce, down 1.57% or $14.40.

Away from the precious metals market, bullish calls returned to kick-start another uptick oil prices, even though uncertainty surrounds the potential restart of oil fields in western Libya, after several reports hinted recently that production was to resume shortly

Last week, opposing Libyan factions reached a deal to resume production from the country's Sharara and El Feel fields, with a combined capacity of over 400,000 barrels per day (bpd). However, regional news outlets claimed the restart had been postponed on account of a payment dispute, thereby reversing the declines of the previous session.

At 2:57pm GMT, the Brent front month futures contract was up 1.60% or 88 cents to $55.80 per barrel, while the West Texas Intermediate was 0.88% or 46 cents higher at $52.58 per barrel.

Jade Fu, commodities analyst at Heartwood Investment Management opined that market evidence points to an improving supply and demand outlook in the first half of 2017, driven by more stable growth in China.

"Opec's decision to cut supply to 32.5m bpd does not shift the outlook materially, although it marks an important step in maintaining Opec's credibility with the markets, and should support sentiment in the near-term.

"It is worth remembering that even with the Opec reduction, the supply of oil is still higher than a year ago, and continues to remain at a multi-year high. Oversupply remains a persistent theme in longer term and will keep a lid on prices. Furthermore, as oil prices recover, US shale supply is likely to increase given how quickly and efficiently production can be resumed."