Gold hits 2-week high as investors seek refuge from Brexit chaos
New York (March 13) Gold rose to a near two-week peak on Wednesday, holding above the key $1,300 mark as uncertainty over Britain's exit from the European Union drove investors to safe haven assets.
Spot gold was up 0.5 percent at $1,308.15 per ounce, at 1107 GMT, having hit its highest since March 1 at $1,308.98.
U.S. gold futures rose 0.8 percent to $1,308.50.
The Brexit vote on Tuesday has given gold a bit of lift, said Quantitative Commodity Research analyst Peter Fertig.
"We have speculators all over the world betting that retail clients are going to buy gold because they could be fearing a hard Brexit, which is now more likely, and they would like to be protected against the negative consequences," he said.
Prime Minister Theresa May suffered a second defeat for her Brexit plan, plunging Britain deeper into a political crisis before the planned EU departure date on March 29. Bullion, considered a refuge in times of political and economic uncertainty, has gained about 13 percent since touching over one-and-a-half year lows in August last year.
"The fact that the precious metal has breached the $1,300 threshold represents a positive signal, opening space for further gains," ActivTrades chief analyst Carlo Alberto De Casa said in a note.
British lawmakers are now expected to reject a no-deal Brexit in a vote at 1900 GMT, and then due to vote again on Thursday on whether to ask for a delay to Brexit, something to which all the EU's other 27 members must agree. World shares slipped amid mounting concern over world growth and trade, while the dollar index fell against a basket of currencies. Adding to gold's appeal were growing concerns over global economic growth. Modest U.S. inflation numbers added to a slew of lacklustre economic data from the country, supporting the Federal Reserve's "patient" stance on rate hikes. Higher rates tend to reduce investor interest in non-yielding bullion.
Investors are also keeping a close eye on next week's Fed meeting and clarity on the U.S.-China trade front. Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, rose about 0.4 percent on Tuesday, a second straight day of gains. Among other precious metals, palladium was up 0.5 percent at $1,549 per ounce, while platinum fell 0.4 percent to $834. Silver climbed 0.5 percent to $15.52 per ounce, having earlier touched its highest since March 1.
Reuters
