November 14, 2018 / 1:22 AM / a month ago

Gold nears one-week high on Brexit deal logjam

BENGALURU (Reuters) - Gold hit a near one-week peak on Thursday as investors sought cover from market turmoil after Britain’s long-awaited draft agreement to leave the European Union was thrown into chaos, helping the metal hold its ground against a rising dollar.

FILE PHOTO: A salesman helps a customer (R) to select gold bangles at a jewelry showroom in Mumbai, India, May 21, 2015. REUTERS/Shailesh Andrade/File Photo

British Prime Minister Theresa May battled to save a draft divorce deal with the EU after her Brexit secretary and other ministers quit in protest and eurosceptic lawmakers stepped up efforts to topple her.

Spot gold XAU= was up 0.3 percent at $1,214.79 per ounce at 13:35 p.m. EST (1835 GMT) after touching its highest since Nov. 9 at $1,216.27 earlier in the session and moving away from a one-month low of $1,195.90 hit on Tuesday.

U.S. gold futures GCcv1 settled up $4.90, or 0.40 percent, at $1,215 per ounce.

“Uncertainty around Brexit is the biggest factor right now. It’s becoming top of the news again,” said Michael Matousek, head trader at U.S. Global Investors.

“People are running to the safety of the hard assets such as commodities including gold and crude, and also the dollar. ... If gold can hold above the $1,209 level, we could see it rise to $1,235.”

The dollar .DXY held its gains versus a basket of currencies as data showed a stronger-than-expected increase in domestic retail sales in October. [USD/]

The currency has emerged as a dominant safe-haven asset this year, denting the appeal for gold, which has fallen 11 percent from an April peak, against the backdrop of a U.S.-China trade row and rising U.S. interest rates.

“Geo-political risk remains high ... it should support gold and lead to gains into year-end and in 2019. This is seen in the political turmoil today and increased uncertainty regarding the outlook for Brexit,” said Mark O’Byrne, research director of Dublin-based gold dealer GoldCore.

On the technical front, while gold could test resistance at $1,235 and $1,250 before year-end, it is vulnerable to short-term weakness, he added.

The trade war shows signs of possibly easing, with U.S. President Donald Trump expected to meet Chinese President Xi Jinping at a G20 summit in Argentina this month.

Palladium XPD= jumped more than 4 percent to hit a record high of $1,178.30 per ounce. The metal, used mainly in emissions-reducing autocatalysts for vehicles, was $35 away from achieving parity with gold.

“There seems to be good demand (for palladium) from electric cars and diesel engines in Europe and China,” said George Gero, managing director at RBC Wealth Management. “Palladium is in shorter supply than people realized.”

Silver XAG= was up 1.3 percent at $14.31 per ounce. It fell to $13.85 in the previous session, a level last seen on Jan. 21, 2016.

Platinum XPT= was up 1.1 percent at $843.50 an ounce.

Reporting by Swati Verma in Bengaluru; Editing by Susan Thomas and Richard Chang

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below