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Gold ends above $1,300 to score highest settlement of the month

Gold ends above $1,300 to score highest settlement of the month

Wed Mar 13 2019

 

Gold futures scored a second straight gain on Wednesday, with a climb above $1,300 an ounce sending prices to their highest settlement month to date.

 

U.K. Prime Minister Theresa May’s Brexit plan faces a fresh vote late in the session after a revised deal was rejected on Tuesday. Fears of a disorderly exit by the U.K. from the European Union before the March 29 deadline to formally leave Europe’s trade bloc has helped to drive appetite in haven assets like gold, market experts say.

 

Gold for April delivery GCJ9, -0.44%  rose $11.20, or 0.9%, to settle at $1,309.30 an ounce, with bullion notching a second straight advance—the longest since mid-February, according to FactSet data. Prices for the most-active contract marked the highest settlement since Feb. 28. Gold-backed exchange-traded fund SPDR Gold Shares GLD, +0.70%  also climbed 0.6%.

 

May silver SIK9, -0.49% gained 4.3 cents, or 0.3%, to $15.456 an ounce.

 

Late Tuesday, Prime Minister May lost the vote on her revised Brexit deal, as expected, by a margin of 149 votes, despite securing last-minute concessions from the European Union over the Brexit divorce deal on Monday.

 

Later Wednesday, Parliament will vote whether to rule out a so-called hard, or disorderly, exit from the EU.

 

“The uncertainty regarding Brexit may have triggered some safe haven buying, but we would argue that the dollar action is the key,” said analysts at Zaner Precious Metals, in a daily note.

 

“The U.K. parliament has another vote today to decide whether they just leave the EU without a deal in place. A ‘yes’ vote may spark some more interest in the metals, but traders should also be cognizant of the currency effect,” they said. “If the pound gets hit hard, it could support the dollar and pressure gold and silver.”

 

On Wednesday, the dollar, as measured by the ICE U.S. Dollar Index DXY, +0.22% traded lower by 0.2%, as the British pound GBPUSD, -0.6673%  strengthened ahead of the “hard Brexit” vote. A weaker dollar tends support prices for dollar-denominated gold.

 

Some better-than-expected U.S. economic data Wednesday did little to support the greenback, even with orders for long-lasting durable goods in January climbing by 0.4%, up a third month in a row. The wholesale cost of U.S. goods and services rose slightly in February, with the producer-price index up 0.1%, but inflation more broadly showed little threat to the economy. U.S. construction spending rose 1.3% in January, the largest increase since April.

 

Among other metals, May copper HGK9, -0.65%  added 0.2% to $2.936 a pound. April PLJ9, -1.10%  rose 1.2% to $841.70 an ounce and June palladium PAM9, -0.37%  traded at $1,506.70 an ounce, up 1.1%.

 

“The prospects of an accommodative Chinese monetary policy have boosted the outlook for Chinese auto catalyst demand, which supports palladium,” the Zaner analysts said. “Palladium prices are at historic highs, but this doesn’t seem to be shutting off demand. Palladium is an essential part of automobile pollution control devices.”

 

 

Source: https://www.marketwatch.com/