Gold ticks up as Brexit triggered, but firm greenback caps increase

NEW YORK/LONDON — Gold edged up on Wednesday, hovering below Monday’s one-month high as uncertainty about Brexit talks, French elections and US President Donald J. Trump’s economic policies boosted safe haven buying and offset a firmer dollar.

Spot gold was up 0.05% at $1,252.20 an ounce by 2:27 p.m. EDT (1827 GMT), while US gold futures settled down 0.20% at $1,253.70.

“There are a lot of uncertainties regarding the Trump reflation trade after the failure last week to overhaul Obamacare, and uncertainty in Europe with French elections coming up and the official start today of Brexit negotiations,” said Carsten Fritsch, analyst at Commerzbank in Frankfurt. “The general picture is still positive (for gold) with dips seen as buying opportunities.”

British Prime Minister Theresa May filed formal Brexit divorce papers on Wednesday, triggering years of negotiations that will test the cohesion of the European Union.

“The thing that’s keeping gold afloat as high as it is, is the political unknown, mostly out of Europe with the French election coming up,” said Bob Haberkorn, senior market strategist for RJO Futures in Chicago.

“Tomorrow, gold will get more direction (from) the GDP data,” he added.

A firmer dollar capped gains in gold, as it rose for the third straight day after Chicago Fed President Charles Evans said he supported one or two more US rate hikes this year.

Strength in the US currency makes dollar-denominated gold more expensive for holders of other currencies, potentially decreasing demand.

Independent technical analyst Cliff Green said the gold price would need to take a breather after failing to break above its 200-day moving average at $1,260.

“It is possibly highlighting the upper boundary of a new consolidation phase with prices likely to experience a rather choppy, two-way market action in the weeks ahead,” Mr. Green told the Reuters Global Gold Forum.

Holdings of SPDR Gold Trust, the world’s largest gold- backed exchange- traded fund that is considered a gauge of investment demand, reported an outflow of 1.8 tons on Tuesday.

In other precious metals, palladium prices slipped 0.70% to $ 786.75 an ounce, after touching a two-year peak of $815.40 on Friday.

Spot silver was up 0.20% at $18.19 per ounce, after nudging up to $ 18.24, the highest since March 2.

Platinum rose 0.30% to $949.35 per ounce. —