Gold price slips on Brexit deal; palladium breaks new records
London (Oct 17) - Gold eased, as investors digested a Brexit deal but lingering uncertainty on U.S.-China trade talks limited losses, while deficit-ridden palladium rose for a fourth straight session to yet another record high.
Spot gold fell 0.3% to $1,485.48 per ounce as of 1005 GMT. U.S. gold futures also dipped 0.3% to $1,488.90. European Commission President Jean-Claude Juncker said Britain and the European Union agreed on a new Brexit deal.
"The gold market did come off after the news of a Brexit (deal)," said Afshin Nabavi, senior vice president at precious metals trader MKS SA.
However, there is mixed information going around and more clarity is awaited with the Democratic Unionist Party sticking to their stance, Nabavi added. Northern Ireland's Democratic Unionist Party said on its position on Brexit had not changed and it could not support the deal. Meanwhile, the dollar fell to an over one-month low, limiting gold's losses.
"Brexit is adding some volatility to the (gold) prices but it's the broader macro picture and trade developments which continue to dictate price action for gold," ING analyst Warren Patterson said. "We might see a short-term pause, but given the broader macro uncertainty and slowing growth, the trend is clearly to the upside for gold."
Weak U.S. retail sales data released on Wednesday fanned fears about the health of the world's biggest economy, aiding the safe-haven sentiment for bullion.
On the U.S.-China trade talk front, negotiators from both sides were working on nailing down a phase 1 trade deal text for their presidents to sign next month, U.S. Treasury Secretary Steven Mnuchin said on Wednesday, but offered little details.
China's commerce ministry said on Thursday that Beijing hoped to reach a phased agreement as early as possible.
On the technicals front, support lay around $1,475 and resistance, around resistance, around $1,515, MKS SA's Nabavi said. "A break of $1,525 should be able to bring in more aggressive buying."
Meanwhile, palladium was up 0.2% at $1,769.73 an ounce, after hitting an all-time high of $1,783.21 earlier in the session.
"The risks of increased supply or of demand substitution are low in the short term, leaving the market structurally tight. This is conducive to higher prices in the medium term," ANZ said in a note.
Palladium is crucial in the making of catalytic converters used in exhaust systems of vehicles, and concerns over its supply running out have helped lift prices by more than 41% this year alone, despite a weakening auto sector. Platinum fell 0.2% to $881.43 per ounce and silver rose 0.2% to $17.42.
Reuters
