By Arijit Bose and Karthika Suresh Namboothiri
(Reuters) – Gold fell more than 1 percent on Thursday, slipping below $1,300 for a second time this month, as fears of a “no-deal” Brexit faded and the dollar gained versus the pound ahead of a vote to extend the deadline for Britain’s exit from the European Union.
Spot gold was down 1 percent at $1,296.51 per ounce as of 2:29 p.m. EDT (1829 GMT), retreating from $1,311.07 reached on Wednesday, its highest since March 1.
U.S. gold futures settled 1.1 percent lower to $1,295.1 an ounce.
“The possibility of a no-deal Brexit being passed had increased the likelihood of widespread buying in gold, and now that it has been rejected, I think some of that safe haven buying in gold is likely to fade,” said Suki Cooper, precious metals analyst at Standard Chartered Bank.
The dollar index drew strength from a subdued pound ahead of a parliamentary vote, expected to call for a short delay to Brexit, later in the day.
Also impeding demand for gold, global equities rode a surge in European stocks as risks of a British no-deal divorce from the EU faded.
“Gold and silver are also experiencing a corrective pullback after prices hit two-week highs on Wednesday,” Jim Wyckoff, senior analyst at Kitco Metals said in a note.
U.S.-China trade talks are also keeping investors on their toes. U.S. President Donald Trump cited progress in the talks, following reports saying leaders of the two countries have postponed their next meeting to at least April.
Trump had earlier emphasized he was in “no rush” to secure a deal with China.
The dollar has been the preferred refuge for investors concerned by the heightened trade tensions since last year, in turn denting appeal for gold.
However, analysts said demand for the metal may soon increase on expectations that the U.S. Federal Reserve would refrain from raising interest rates after their policy meeting next week.
“We expect the Fed to remain on hold, and other major central banks to hike less and/or later. Moreover, we expect the 10-year U.S. Treasury yield and 10-year real yields to decline slightly. This should support gold prices,” analysts at ABN Amro said in a note.
Silver slipped for the first time in five sessions and was down nearly 2 percent at $15.18 per ounce.
Palladium inched 0.1 percent higher to $1,557.51 per ounce, while platinum dipped 1.6 percent to $823.77.
(Reporting by Arijit Bose and Karthika Namboothiri in Bengaluru; Editing by Susan Thomas and Richard Chang)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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Updated Date: Mar 15, 2019 01:05:56 IST