October 24, 2019
Gold holds ground as investors await clarity on Brexit
(Reuters) - Gold prices barely moved on Thursday as investors waited for fresh developments on the Sino-U.S. trade front, and clarity on Brexit, after the European Union delayed a decision on granting Britain an extension.
Spot gold was unchanged at $1,492.34 per ounce by 0432 GMT. U.S. gold futures were flat at $1,495.10 per ounce.
"Overall, gold is consolidating at the bottom of its medium-term range, implying that the next move is down, assuming the mini-trade deal goes through," OANDA analyst Jeffrey Halley said, referring to the Sino-U.S. trade talks.
The trade war between the world's two biggest economies has hit financial markets and forced most major central banks to cut interest rates this year.
Both have imposed a series of tit-for-tat tariffs over the past 15 months, stirring global recessionary fears and driving gold prices to climb more than 16% this year.
The non-yielding bullion is often seen as a safer investment during times of political and financial uncertainty.
Halley pointed to a lot of stale long positions and said a breakdown through $1,460.00 was likely to prompt more long-term holders to unwind positions to lock in profit.
European Union members on Wednesday delayed a decision whether to grant Britain a three-month extension on Brexit, while Prime Minister Boris Johnson said if the deadline was deferred until the end of January he would call an election by Christmas.
Market participants await European and U.S. manufacturing numbers due later on Thursday, to gauge the health of the global economy, and a European Central Bank meeting, with no change to
policy expected at President Mario Draghi's last meeting.
Investors also await the U.S. Federal Reserve's meeting on Oct. 29 and 30, at which it is expected to cut its benchmark interest rate for a third consecutive time this year.
Federal fund futures imply that traders see a 91.4% chance for a 25 basis point rate cut.
Asian shares pulled ahead on Thursday, with corporate earnings buffeting trading as investors remained anxious about the business impact of the Sino-U.S. trade war and Brexit uncertainties kept overall sentiment in check.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.13% to 918.48 tonnes on Wednesday from 919.66 tonnes on Tuesday.
Elsewhere, silver was flat at $17.56 an ounce.
Platinum was up 0.8% at $922.65 per ounce, after scaling a more than three-week high earlier, while palladium rose 0.6% to $1,752.63 per ounce.