Gold firms on Brexit jitters but trade optimism caps gains
By Eileen Soreng
Oct 22 (Reuters) - Gold prices inched higher on Tuesday ahead of a crucial vote by British lawmakers on the Brexit withdrawal agreement, although prospects for a U.S.-China trade deal limited bullion's gains.
Spot gold XAU= was up 0.2% at $1,487.63 per ounce as of 1042 GMT, having hit a roughly one-week low of $1,480.44. U.S. gold futures GCcv1 were also up 0.2%, at $1,490.70.
"There is an uncertainty about Brexit and some people realise that there still are roadblocks ahead," Quantitative Commodity Research analyst Peter Fertig said.
"We have a rebound in government bond prices, including in Germany and Italy, which is pointing to a flight back into safe havens," Fertig said, noting declining yields are supportive for gold.
Euro zone government bonds edged down before a vote in the British parliament crucial to determining whether the United Kingdom can leave the European Union in an orderly way at the end of the month.
Prime Minister Boris Johnson faces two pivotal votes in parliament on Tuesday that will decide whether he can deliver on his pledge to lead Britain out of the EU in nine days' time.
Lawmakers vote at around 1800 GMT on the 115-page Withdrawal Agreement Bill and then on the government's extremely tight timetable for approving the legislation.
Capping bullion's gains was optimism induced by talk of progress in China-U.S. trade negotiations that propped up sentiment for riskier assets. MKTS/GLOB
"The precious metal is waiting for the next big theme or market-moving event that will influence global sentiment and risk appetite," FXTM analyst Lukman Otunuga said in a note.
"Until something fresh is brought into the picture, gold is positioned to trade within a modest range in the short to medium term," Otunuga added.
China and the United States have achieved some progress in their trade talks, Chinese Vice Foreign Minister Le Yucheng said on Tuesday.
Those comments came a day after U.S. President Donald Trump spoke of optimism about a deal, while White House adviser Larry Kudlow said tariffs on Chinese goods scheduled for December could be withdrawn if talks went well.
Spot gold is poised to break support at $1,479 per ounce and fall towards the next support at $1,456, Reuters technical analyst Wang Tao said.
Silver XAG= rose 0.4% to $17.63 an ounce, gaining for a fifth straight session. Platinum XPT= was up 0.2% at $889.77 and palladium XPD= was 0.1% higher at $1,759.47 an ounce.
(Reporting by Eileen Soreng in Bengaluru Editing by David Holmes and Dale Hudson)
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