Last updated on October 23rd, 2019 at 09:48 am
The prices of gold rose on Tuesday, October 22, 2019, because of concerns about the British parliament’s vote on the Brexit withdrawal agreement. However, the gains of the yellow metal were capped by progress in the trade negotiations between the U.S. and China.
Gold futures increased by 0.2% to $1,491.10 an ounce while spot prices gained 0.3% to settle at $1,487.98 an ounce.
According to Quantitative Commodity Research analyst Peter Fertig, there are still obstacles to the signing of a Brexit agreement. The uncertainties in finalizing a Brexit deal have pushed the prices of government bonds up in the Eurozone area which led investors back to safe-haven assets. He explains that when bond prices go up, bond yield goes down. And declining bond yields raise the demand for gold.
The British Parliament will vote on the 115-page Withdrawal Agreement Bill on Tuesday 1800 GMT and on the government’s schedule for the approval of the legislation.
The Tuesday gains of the precious metal were limited by the positive development in the Sino-U.S. trade talks which encouraged investors to bet on riskier assets.
China’s Vice Foreign Minister Le Yucheng said that the Chinese and the Americans have already made progress on reaching a trade deal. U.S. President Donald Trump has also expressed optimism about the possibility of reaching an agreement. Larry Kudlow, a White House adviser, announced that the planned imposition of additional tariffs on Chinese products in December may be canceled if the negotiations go well.
FXTM analyst Lukman Otunuga believes that gold is likely to remain in its current trading price range until a major event that can influence risk appetite or global sentiment comes.
Wang Tao, a technical analyst for Reuters, predicts that gold is likely to fall below at its current support pricing level of $1,479 an ounce and drop further to the next support level of $1,456 an ounce.