From Eileen Soreng and Arijit Rose: *Markets await vote on Brexit deal, set to start at 1900 GMT
* Palladium continues to trade at premium to gold
* GRAPHIC-Gold vs currencies:
* Current price levels could prompt physical gold demand-analyst
ActivTrades chief analyst Carlo Alberto De Casa said the dollar’s strength was pressuring gold.
“Gold is still in a lateral range … unable to move above $1,300 or fall below $1,276,” he said.
The dollar was bolstered by weakness in the euro, which fell to a five-day low as the continent’s largest economy struggles with weaker global demand and trade disputes. Also hurting the metal was a recovery in equities, which strengthened after Beijing signaled more supportive measures to stabilize a slowing economy, and emphasized that China is seeking a strong start in the first quarter. However, the outlook for global growth has been clouded by weak economic data dampening risk sentiment and helping the case for gold over the past few weeks.
“Gold is holding quite nicely near the $1,290 level, which is quite a healthy position,” said Philip Newman, director at Metals Focus.
“The fact that prices have held broadly at these levels for quite some time could encourage the physical markets to come back in.”
With the Chinese New Year drawing closer, physical gold is likely to see a boost in demand due to festive buying. Investors will now focus on Britain’s parliamentary vote on Prime Minister Theresa May’s Brexit policy. Despite gold having already priced in a widely expected defeat for the British Prime Minister, the uncertainty lies in what will happen after the vote, Newman said, adding the “uncertainty could generate some interest in gold in the continent.”
Elsewhere, palladium rose 0.3 percent to $1,327.50 per ounce. The metal continues to trade at a premium to gold, hovering below an all-time peak of $1,342.43 hit last week.
“We see a sizeable physical deficit in palladium. Fundamentally, demand is also strong,” Newman said, adding that prices could continue to strengthen through 2019.
Among other metals, platinum shed 0.3 percent to $797 per ounce, while silver fell 0.6 percent to $15.56.
(Reporting by Eileen Soreng in Bengaluru, editing by Louise Heavens)
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The SPDR Gold Shares (GLD) was trading at $121.76 per share on Tuesday afternoon, down $0.33 (-0.27%). Year-to-date, GLD has declined -1.53%, versus a -2.02% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Kitco.