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Gold rises as investors await more signals on Brexit, trade

Gold rises as investors await more signals on Brexit, trade

Mubasher: Gold prices rose on Wednesday, as investors were waiting for further clarity on the Brexit and trade conflict between the US and China, while technical buying gave the metal slight support.

By 9:46 am GMT, spot gold rose by 0.42% to $1,493.92 per ounce, while US gold futures climbed by 0.65% to $1,497.20 per ounce.

“Gold has been rising modestly on technical buying since it fell to the $1,470 level,” SMC Comtrade commodity research assistant vice-president Vandana Bharti was quoted by Reuters.

Brexit uncertainty dragged on Asian shares and US stock futures after UK parliament rejected Downing Street’s proposed schedule for passing legislation to ratify its transition deal for leaving the European Union (EU).

Furthermore, European Council president Donald Tusk on Tuesday urged EU leaders to postpone Brexit, after Prime Minister Boris Johnson halted legislation on his deal after a parliamentary defeat.

The UK was heading towards a possible election to resolve the Brexit deadlock.

On the trade side, talks between the US and China yielded progress, Vice Foreign Minister Le Yucheng said, noting that as long as there is a mutual respect, no issue could not be resolved.

The world’s two top economies were embroiled in a protracted trade conflict since last year, dealing a hit to financial markets and raising worries of a global recession.

Federal fund futures pointed that investors were seeing 91.4% chance of a 25 basis point (bp) interest rate cut by the Federal Reserve at its next meeting by the end of this month.