Gold prices dipped on Friday as investors booked profit after the European Union forged a new Brexit deal with Britain, though a floor was kept under prices by uncertainties over trade negotiations and the global economy.
Spot gold edged down by 0.1 per cent to $1,490.05 an ounce at 07:22 GMT. US gold futures fell 0.4 per cent to $1,493.
‘Considering the present uncertainties around the US-China trade war and other geopolitical risks, gold still has potential upside,’ said Hareesh V, head of commodity research at Geojit Financial Services, attributing the slight price dip to profit-taking.
The European Union backed a new Brexit deal with Britain on Thursday, prompting an uptick in Asian shares in early trade. However, gains were capped by disappointing economic growth data from China.
While markets cheered progress on Brexit, doubts will resurface if British prime minister Boris Johnson is unable to secure UK parliament backing for the agreement to take Britain out of Europe on October 31.
‘Gold will be range-bound until and unless we have some clarity on Brexit and other geopolitical risks,’ said Brian Lan, of Singapore dealer GoldSilver Central, adding that he expects gold to trade around $1,475 to $1,503 per ounce over the short term.
Worries surrounding a trade war between the United States and China continue to linger, with China’s third-quarter economic growth slowing more than expected to its weakest pace in almost three decades.
The dollar index at a near eight-week low has also supported gold.
ANZ Bank said that it expected gold to be supported by elevated macroeconomic and geopolitical risks, with prices for under-supplied platinum group metals likely to push higher.
‘The palladium market is still structurally tight, keeping prices resilient, with intermittent volatility.’
Among other precious metals, palladium rose 0.2 per cent to $1,762.91 an ounce, a day after hitting a record high of $1,783.21. The autocatalyst metal was up 3.7 per cent on the week and set for its best since the week of Sept. 13.
Platinum was down 0.2 per cent at $885.40 while silver fell 0.1 per cent to $17.51.
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