Gold Prices Trade Sideways as Brexit Uncertainty Drags On

Gold Prices Trade Sideways as Brexit Uncertainty Drags On  | Oct 21, 2019 16:17

Gold Prices Trade Sideways as Brexit Uncertainty Drags On -- Gold prices traded sideways again on Monday, dipping fractionally below $1,500 an ounce but not meaningfully lower, as a definitive resolution of the Brexit stayed stubbornly out of reach of U.K. politicians.

Having pulled a formal vote on Saturday on the withdrawal agreement sealed last week with the European Union, the U.K. government failed in its attempt to have the motion debated again in the House of Commons on Monday, as the House Speaker invoked a protocol banning government from putting the same motion before the House more than once in a session.

As such, and under the terms of an amended motion that did pass the Commons on Saturday, there will be no "meaningful vote" on the deal until legislation implementing it has been enacted. What that means is that opponents of Brexit have bought more time for Prime Minister's Boris Johnson's deal to be properly scrutinized by the legislature. Johnson had sought a straight 'up-or-down' vote on the deal today, even though most members had not had time to read the legal text.

The result was that European government bonds, led by the U.K., trimmed their losses after a surge of optimism in the morning had prompted money to flow out of haven assets. By 11 AM ET (1300 GMT), gold futures were down 0.1% at $1,491.45 a troy ounce, while spot gold was also down 0.1% at $1,488.56.

Prices also came under pressure from rising bond yields in the U.S., where hopes of progress on the U.S.-China trade dispute were kept alive by constructive comments on both sides over the weekend. White House economic advisor Larry Kudlow told Fox Business on Monday that a new tariff increase scheduled for December could be scrapped if talks continue to progress well.

However, Commerce Secretary Wilbur Ross had said earlier that: "We would like to make a deal, but from our point of view it has to be the right deal and it doesn’t have to be in November," Ross said. "It’s more critical that it be a proper deal than exactly when it occurs.”

Elsewhere, silver futures hit a three-week high of $17.89 an ounce, amid signs of a rotation by portfolio investors out of gold. Net speculative interest in gold fell to its lowest level in three months last week, according to data from the Commodity Futures Trading Commission.

Platinum futures fell 0.6% to $890.20 an ounce.

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