Prices of gold were generally unchanged late Wednesday, as investors expected more clarity on the Brexit issue and the US-China trade showdown, but the bullion received modest support from a rally on the bond markets.
Spot gold soared by 0.4 percent to $1,489.08 per ounce as US gold futures advanced to $1,492.20 an ounce by 0.4 percent. "Conditions were calm on the trade front," Michael McCarthy, CMC Markets chief strategist, said, despite the Brexit noise.
According to analysts, gold prices are ranging from $1,490 to $1,535 and, until a break occurs in one of those two levels, traders could not determine a precise direction.
Asian shares and US stock futures took a hit after British legislators rejected the proposed timetable for their government to pass legislation to ratify their deal to leave the European Union.
EU leaders must suspend Brexit after Premier Boris Johnson suspended legislation on his offer after a legislative setback, EU Council President Donald Tusk said on Tuesday as Britain turns towards a new vote to break the deadlock.
US Treasury output was down early Tuesday as investors bought safe-haven properties after British regulators voted against the tight deadline for Prime Minister Boris Johnson to back his proposition for Britain to abandon the European Union.
During moments of financial and political uncertainty, American treasury and silver are both viewed as a better option. As a matter of fact, a rise in bond boosts the yellow metal values.
On the trade war line, China and the U.S. made some progress in talks, Vice Foreign Minister Le Yucheng said on Tuesday, adding that no problem could be solved as long as both sides valued each other.
Over the past 15 months, the two major economies have imposed a series of tit-for-tat tariffs that have struck financial markets and stirred global fears of a recession.
Meanwhile, futures from the Federal Reserve suggest that investors see a 91.4 percent chance at their month-end monetary policy conference for a 25-base point rate cut by the US Federal Reserve.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its reserves dropped from 924.64 tons on Monday to 919.66 tons on Tuesday.
Gold futures in December climbed to 38,077 per 10 gram by 196. It opened flat on October 22 at 37,881.
On October 22, gold and silver values exchanged in a negative bias band. Spot gold finished under $1490 and silver ended on the international market at $17.52 per troy ounce.
Elsewhere, the yellow metal was off 0.3 percent on an ounce at $17.49. Platinum retreated to $889.70 0.2 percent and palladium was down $1,748.69 per ounce at 0.39 percent.
