Gold rises above 1300 United States dollars

  • Gold rises above 1300 United States dollars

Gold rises above 1300 United States dollars

Gold gained overnight as the United States dollar slipped after tame U.S. inflation data supported the Federal Reserve's "patient" stance on interest rate hikes, while investors awaited a key Brexit vote.

Silver advanced 0.6 per cent to $US15.41 per ounce, after touching its highest since March 1 earlier in the session.

U.S. retail sales rose 0.2 in January, surprising economists who had expected an unchanged result. "This, coupled with the Brexit news, is helping gold", said Bob Haberkorn, senior market strategist at RJO Futures.

USA producer prices barely rose last month, resulting in the smallest annual increase in more than 1-1/2 years, reinforcing views that the Federal Reserve would be patient on future rate hikes.

The dollar index dropped about 0.3 percent in the previous session on the tame United States inflation data, making bullion cheaper for investors holding other currencies.

Market participants will now focus on the Bank of Japan's (BOJ) monetary policy meeting on March 14 and March 15. "Traders are buying into the fact that they are expecting a very dovish US Fed announcement", Haberkorn said. U.S. retail sales rose modestly in January, but the recovery was not seen as strong enough to alter the course of a United States economy that is losing momentum in early 2019.

Investors would now be keeping a close eye on a vote on the Brexit deal around 3:00 p.m. ET (1900 GMT), with Prime Minister Theresa May's newly won assurances on her divorce deal failing to win over the main Brexit faction in her Conservative Party.

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Tuesday as the USA dollar weakened.

The result plunged the country into fresh instability just 17 days before the planned exit day of March 29.

"The ongoing Brexit (uncertainties) has diminished risk appetite as investors are increasingly unnerved on the potential of a "hard Brexit" deal", said Benjamin Lu, analyst with Singapore-based Phillip Futures. "This should support gold prices", analysts at ABN Amro said in a note.

Among other precious metals, palladium was up 0.2 percent at 1,539.55 per ounce, while platinum gained 0.8 percent to $831.53.