Gold rises amid weakened U.S. dollar, Brexit uncertainty

Mae Love
March 15, 2019

Spot gold rose 0.2 per cent to $1,295.89 per ounce as of 1055 GMT, while U.S. gold futures were up 0.4pc at $1,296.20.

Gold edged lower on Tuesday as appetite for risk improved after the European Commission agreed additional assurances in an updated Brexit deal, while stronger than expected United States data eased some fears about an economic slowdown.

Silver slipped for the first time in five sessions and was down almost 2 percent at $15.15 per ounce. "This, coupled with the Brexit news, is helping gold", said Bob Haberkorn, senior market strategist at RJO Futures. Tepid inflation and disappointing producer price data this week support the Fed's stance of keeping interest rates on hold, denting the dollar and lifting demand for non-interest-yielding gold.

Market participants will now focus on the Bank of Japan's (BOJ) monetary policy meeting on March 14 and March 15.

Gold is facing stiff resistance at the $US1,300 mark, having failed to significantly break above the key psychological ceiling, despite recent momentum on the back of the USA dollar's declines fuelled by weak USA jobs data and modest retail sales in January. "Metals technically have more upside to go just on rising geopolitical uncertainty, specifically what's going on in Britain", Haberkorn added.

Asian shares rose after the European Commission agreed to changes to the Brexit deal ahead of a vote in the British parliament on a divorce agreement.

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British lawmakers voted by a margin of 43 to confirm their decision to reject any no deal Brexit. The country's political crisis has deepened because it does not have a deal yet with the deadline of 29 March for the planned departure drawing closer.

USA gold futures also dipped 0.8 percent, to $1,298.30 an ounce. "This should support gold prices", analysts at ABN Amro said in a note.

The continuing concern over the possibility for a "hard Brexit" sent traders flocking towards safe-haven assets.

Among other precious metals, palladium was down 0.4 percent at $1,549.49 per ounce, while platinum dipped 1.2 percent to $827.49 per ounce.

USA gold futures were up 0.1 percent at $1,292.90 an ounce.

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