Gold rose overnight as weak data from the United States rekindled fears of an economic slowdown and as concerns surfaced over possible risks to a new Brexit deal while supply-squeezed palladium continued its record run.
Spot gold was up 0.4 per cent at $1,495.31 per ounce.
US gold futures settled 0.3 per cent higher at $US1,498.30 an ounce.
“Geo-political tensions are ratcheting back up again, the US Federal Reserve will likely continue their pace on cutting rates, which will be supportive for gold,” said Phillip Streible, senior commodities strategist at RJO Futures.
Lifting gold’s safe-haven appeal, weak retail sales data and industrial output report out of the United States fanned fears about the health of the world’s biggest economy, amid the prolonged China-US trade dispute.
Also providing further support for bullion, the US dollar slipped to an more than one-month low.
Earlier in the day, gold denominated in sterling slid as much as 1.6 per cent to its lowest since July 26 at 1,141.86 pounds an ounce after Britain and the European Union agreed to a new Brexit deal.
Prices are now up about 0.1 per cent at 1,161.63 pounds an ounce.
“There were some fears regarding the Brexit deal if it couldn’t pass through, which creates lot of uncertainty between the European Union and UK. That’s why gold futures had a little bit of bounce up,” Streible added.
Doubts emerged on the chances of British Prime Minister Boris Johnson will win parliamentary ratification of the deal.
The Irish border riddle remained a sticking point for Northern Ireland’s Democratic Unionist Party (DUP), which has refused to support the agreement.
On the technical front, “gold now needs to break resistance around $US1,498-$US1,500 area in order to brighten the short-term outlook, while a rally outside of the bull channel would be a more decisive signal for the bulls,” Fawad Razaqzada, market analyst with Forex.com, said in a note.
Among other precious metals, palladium fell 0.4 per cent to $US1,760.14 an ounce after hitting an all-time high of $US1,783.21 earlier in the session.
Palladium is crucial in the making of catalytic converters used in exhaust systems of vehicles, and concerns over its supply running out have helped lift prices by more than 41 per cent this year alone despite a weakening car sector.
“Palladium market is still hampered by strengthening demand, weaker supply. Demand for the metal will continue to move higher, mainly from China,” RJO Futures’ Streible said.
Platinum gained 0.7 per cent to $US888.86 per ounce and silver climbed 1.2 per cent higher to $US17.60.