Gold rises on amended Brexit deal; dollar weakens against pound

Gold rises on amended Brexit deal; dollar weakens against pound

Mubasher: Gold prices went up on Tuesday as the US dollar lost ground against the UK pound after the European Commission agreed to changes to  Brexit deal.

However, the agreement between the UK and European Union (EU) also propped appetite for riskier assets.

By 11:51 am GMT, US gold futures rose 0.39% to $1,296.10 per ounce, while gold spot went up 0.19% to $1,295.77 per ounce.

The US dollar went down against a basket of six major rivals, making the yellow metal more attractive for non-US currency holders, while the sterling pound surges following the Brexit deal amendments.

By 11:54 am, the US dollar index declined 0.14% to 97.0760.

European Commission President Jean-Claude Juncker on Monday agreed with UK Prime Minister Theresa May on an updated Brexit deal in order to make the deal more acceptable for the House of Commons.

“There was a bit of move out of the US dollar which lifted gold slightly,” Melbourne-based IG Markets market analyst Kyle Rodda told Thomson Reuters, noting that the growing risk-taking sentiment kept a lid on the gold’s gains.

In addition, mounting concerns about global economic growth gave floor for gold prices.

Although US retail sales rose modestly last January, the recovery was not strong enough to change the path of the economy which was slowing down earlier this year.

“Market is now awaiting US consumer prices index [CPI] data and any changes may affect the stance of Federal Reserve,” SMC Comtrade commodity research assistant vice-president Vandana Bharti told Reuters.