Gold edged down on higher shares on Wednesday, but was poised to end 2014 steady around $1,200 an ounce as the impact of a stronger dollar was offset by demand from investors worried about tensions in Russia and political uncertainty in Greece.

Bullion was on track for a 0.5 per cent fall this year after a turbulent 2013, when prices fell by a third after 12 years of gains.

Spot gold was down 0.1 per cent at $1,199.20 an ounce by 1054 GMT. On Tuesday, the metal climbed to $1,209.90, its highest in nearly two weeks, as concerns over tension between Russia and the West weakened the dollar and stock markets.

Prices have been relatively less volatile in 2014 compared to last year's 28 per cent slide and $500 trading range. Despite falling to a 4-1/2 year low in November, gold has traded in a $260 range for the year.

Gold's main driver in 2014 has been a bouyant dollar, which was poised to post its biggest yearly gain since 2005, and anticipated U.S. interest rate hikes may strengthen its appeal in the coming year. Higher rates weigh on non-interest-bearing bullion.

On Wednesday, the dollar was down 0.1 per cent against a basket of main currencies, while European stocks edged higher, after suffering from uncertainty in Greece ahead of a January election in the previous session.

"Considering the strong dollar performance in 2014, gold's downside this year has been a little bit protected by international political events that have attracted some safe-haven buying, especially in the first half," ABN Amro commodity strategist Georgette Boele said.

"But a new drop in gold prices driven by a stronger dollar and higher U.S. interest rate expectations is likely in 2015, when we see prices average $1,000 an ounce."

Investors continued to run down gold holdings in 2014, with the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, falling by 140 tonnes to six-year lows of 710.81 tonnes. Redemptions, however, were much smaller than in 2013, when the fund saw a record outflow of 460 tonnes, or 39 per cent, to around 850 tonnes.

Physical demand for gold was boosted by the holiday season and upcoming Lunar New Year celebrations in China, when gold is bought for good fortune and to be given as gifts, traders said.

Silver was on track for a 17-per cent annual decline and platinum, down 0.7 per cent at $1,204.49 an ounce was also headed for a yearly fall. With a 13 per cent jump, palladium was the best performer among precious metals this year, mostly on supply concerns from top producer Russia. Prices were unchanged at $800 an ounce.- Reuters