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Gold declines as markets await more Brexit clarity

Gold declines as markets await more Brexit clarity

Mubasher: Gold prices declined on Thursday as markets awaited clarity on Brexit after the European Union (EU) postponed a decision on departure deadline delay, according to Reuters.

However, a weaker US dollar kept a lid on declines.

By 10:18 am GMT, spot gold declined by 0.18% to $1,489.39 per ounce, while US gold futures fell by 0.28% to $1,491.50 per ounce.

EU members delayed their decision on whether to grant the UK a three-month extension.

UK Prime Minister Boris Johnson said he would call for an election by Christmas, if the Brexit deadline was postponed for three months.

However, “there are enough geopolitical uncertainties to keep gold supported for the next two to three years,” even if Brexit is delivered, Geojit Financial Services commodity research head Hareesh V was quoted by Reuters.

Volatility gripped markets for months amid anxieties, including the trade conflict between the US and China, Brexit, Hong Kong anti-government protests and geopolitical tensions in the Middle East, all of which are bullish factors for the yellow metal.

A weakening US dollar against six major currencies helped limiting the slide.

“The dollar [index] has corrected from the 99.5 level to 97.2 on a continuous basis for the last two weeks” Hareesh V said.

The US dollar index ticked up by 0.01% to 97.5020.

Market participants also were awaiting for manufacturing data from the US due later in the day as they were looking for hints on the health of the global economy.

Moreover, the US Federal Reserve is due to meet on 29 and 30 October, amid expectations of another interest rate cut.