Gold Firm Ahead Of Brexit Vote But Risk Mood Caps Gains
By Karthika Suresh Namboothiri
Oct 22 (Reuters) - Gold edged higher on Tuesday ahead of a crucial vote by British lawmakers on the Brexit withdrawal agreement, but buoyant Asian shares on progress in U.S.-China trade talks limited gains.
Spot gold inched 0.2% higher to $1,487.20 per ounce as of 0758 GMT.
U.S. gold futures also gained 0.2% to $1,490.30.
In the latest on the Brexit proceedings, British Prime Minister Boris Johnson's parliamentary battle starts again, when lawmakers will debate and vote on the Withdrawal Agreement Bill, the detailed legislation that puts his exit deal into British domestic law.
Markets gained overnight on Wall Street with the benchmark S&P 500 stock index rising to within striking distance of a record high on reports of progress in U.S.-China trade talks.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.4% on Tuesday.
China and the United States have achieved some progress in their trade talks, Chinese Vice Foreign Minister Le Yucheng said on Tuesday, adding that as long as both sides respected each other, no problem could not be resolved.
Le's comments came a day after U.S.
President Donald Trump spoke of optimism about a deal, while White House adviser Larry Kudlow said tariffs on Chinese goods scheduled for December could be withdrawn if talks go well.
"Equities markets are in a risk-on mode, and there seems to be a lack of support for gold prices and precious metals," said Margaret Yang Yan, a market analyst at CMC Markets, adding that fears of a no-deal Brexit had ebbed and progressing U.S.-China trade talks gave markets some relief.
"This (slip in prices) does not mean gold will continue to decline, because the market sees the Fed cutting another 25 basis points in its October meeting. For now it still looks like a healthy correction," Yan said
Investors are awaiting a U.S.
Federal Reserve meeting at the end of the month that could offer further signs of monetary easing. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
"Though we remain optimistic on safe-haven appeal for Q4, traders should take caution at key support level of $1,480 as strong technical selling may drive gold prices towards $1,473 and $1,459 in the near term," Phillip Futures analyst Benjamin Lu said.
Among other precious metals, silver rose 0.3% to $17.61 an ounce, extending gains for a fifth straight session. Platinum dipped 0.1% to $887.11 and palladium gained 0.3% to $1,763.05 an ounce.
(Reporting by Karthika Suresh Namboothiri in Bengaluru; Editing by Shounak Dasgupta and ads-inform.ru David Evans)