October 18, 2019 / 1:25 AM / a month ago

Gold steady as Brexit deal lifts stocks, pressures dollar

(Reuters) - Gold prices held steady on Friday after Britain managed to eke out a deal for its exit from the European Union, lifting risk appetite, while a sluggish dollar provided support to the metal.

FILE PHOTO: An employee takes granules of 99.99% pure gold at the Krastsvetmet non-ferrous metals plant, one of the world's largest producers in the precious metals industry, in the Siberian city of Krasnoyarsk, Russia November 22, 2018. REUTERS/Ilya Naymushin/File Photo

FUNDAMENTALS

Spot gold XAU= was unchanged at $1,491.62 an ounce as of 0057 GMT. U.S. gold futures GCcv1 shed 0.2% to $1,495.40 per ounce

Asian shares inched higher following Britain’s deal with the European Union, with MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS up 0.1%.

The dollar slipped to a near eight-week low in the previous session, keeping gold prices propped up.

European Union leaders unanimously backed a new Brexit deal with Britain on Thursday, leaving Prime Minister Boris Johnson facing a battle to secure the UK parliament’s backing for the agreement if he is to take Britain out of Europe on Oct. 31.

Johnson said he was confident that parliament would approve the deal. But the arithmetic in the vote is not simple.

Lifting gold’s safe-haven appeal, weak retail sales data and industrial output report out of the United States fanned fears about the health of the world’s biggest economy, amid the prolonged Sino-U.S. trade dispute.

The Chinese commerce ministry said on Thursday that China hoped to reach a phased agreement with the United States over trade as early as possible, and make progress on cancelling tariffs on each others’ goods.

China is expected to post its weakest economic growth in at least 27-1/2 years later in the session, raising pressure on Beijing to roll out more stimulus to counter the effects of the costly trade war.

The International Monetary Fund on Thursday welcomed signs of a de-escalation in U.S.-China trade tensions but said an urgent updating of trade rules was needed to restore strong growth to the global economy.

Palladium XPD= was flat around $1,758.53 after having notched a fresh high of $1,783.21 an ounce in the previous session.

Reporting by Karthika Suresh Namboothiri in Bengaluru; Editing by Shounak Dasgupta

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