Gold steady as investors await Brexit clarity, Fed meeting

A mark of 999.9 fine sits on hallmarked one kilogram gold bullion bars at the Valcambi SA precious metal refinery in Lugano, Switzerland, on April 24, 2018.

Stefan Wermuth | Bloomberg | Getty Images

Gold held ground above $1,490 per ounce on Thursday as investors awaited clarity on Brexit after the European Union delayed a decision on granting an extension to Britain, and the U.S. central bank policy meeting for clues on the interest rate trajectory.


Spot gold was unchanged at $1,491.83 per ounce as of 0129 GMT. U.S. gold futures were flat at $1,494.60 per ounce.

EU member states on Wednesday delayed a decision on whether to grant Britain a three-month Brexit extension, while Prime Minister Boris Johnson said if the deadline is deferred to the end of January he would call an election by Christmas.

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 while Brexit uncertainties kept overall sentiment in check.

Meanwhile, Federal fund futures imply that traders see a 91.4% chance for a 25 basis point rate cut by the U.S. central bank in its month-end monetary policy meeting.

The U.S.-China trade war has hit financial markets and forced most major central banks to cut interest rates this year.

The non-yielding bullion is often seen as a safer investment during times of political and financial uncertainty.

Inflation in the euro zone languishes at less than half the European Central Bank’s target, the economic outlook is darkening again, and support for ECB President Mario Draghi’s brand of aggressive money printing has never been lower among rate-setters.

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. 

Platinum rose 0.5 % to $919.60 per ounce, after scaling a more than three-week high in the previous session.

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