Gold prices were largely unchanged on Wednesday, as investors awaited more clarity on the Brexit and the US-China trade war, while some technical buying provided modest support to the bullion.
Spot gold was up 0.1 per cent at $1,489.31 per ounce as of 0622 GMT. US gold futures rose 0.3 per cent to $1,492.40 per ounce.
“Gold has been rising modestly on technical buying since it fell to the $1,470 level,” said Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade.
“What we see today is a continuation of that but uncertainty over Brexit is also providing some support.”
Asian shares and US stock futures took a hit after British lawmakers rejected their government’s proposed timetable for passing legislation to ratify its deal to exit the European Union (EU).
EU leaders should delay Brexit after Prime Minister Boris Johnson paused legislation on his deal following a parliamentary defeat, EU Council President Donald Tusk said on Tuesday, as Britain spins towards a possible election to break the impasse.
On the trade war front, China and the United States have achieved some progress in trade talks, Vice Foreign Minister Le Yucheng said on Tuesday, adding that as long as both sides respected each other, no problem could not be resolved.
The two major economies have imposed a series of tit-for-tat tariffs over the past 15 months that have hit financial markets and stirred up global recessionary fears.
Gold is perceived as a safe haven asset and is often used as a hedge against political and economic uncertainties.
Meanwhile, Federal fund futures imply that traders see a 91.4 per cent chance for a 25 basis point rate cut by the US central bank in its month-end monetary policy meeting.
Indicative of investor interest, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.5 per cent to 919.66 tonnes on Tuesday from 924.64 tonnes on Monday.
“Prices are swinging between $1,490 and $1,535. Until we break one of those two levels, we really do not a have a direction,” said Michael McCarthy, chief market strategist at CMC Markets.
Spot gold is biased to break a support at $1,479 per ounce, and fall towards the next support at $1,456, Reuters technical analyst Wang Tao said.
Elsewhere, silver was down 0.1 per cent at $17.49 an ounce. Platinum inched up 0.1 per cent to $892.28 and palladium was steady at $1,755.49 per ounce.
