Gold prices wavered Thursday morning as the European Union and U.K. reached a preliminary Brexit deal. However, worries that a deal may not pass a weekend vote in the British parliament and signs of a weakness in the U.S. economy appeared to buoy gold prices, capping any decline.
Gold for December delivery on Comex GCZ19, +0.21% edged 90 cents, or less than 0.1%, higher at $1,494.90 an ounce, following a 0.7% decline on Wednesday.
December silver SIZ19, +0.94%, meanwhile, gained 14 cents, or 0.8%, at $17.565 an ounce, following a 0.3% gain on Wednesday.
British Prime Minister Boris Johnson and European Commission President Jean-Claude Juncker, agreed on a pact that would see an orderly exit for Britain from the European Union. However, Johnson needs parliamentary approval, with a vote set for Saturday that appears unlikely to be greenlighted by legislators.
Meanwhile, investors digested a batch of mostly weaker-than-expected U.S. data, which could cement expectations for interest rate cuts from the Federal Reserve. The Philadelphia Fed said its gauge of business activity fell to 5.6 in October from 12 in September, with economists polled by Econoday expecting a 7.1 reading and a report on industrial production from the Federal Reserve fell 0.4% in September, marking the biggest drop since April.
Separately, data showed that U.S. housing starts slid to an annual rate of 1.26 million last month from a revised 1.39 million in August, and initial jobless claims increased by 4,000 to 214,000 in the week of Oct. 6 to Oct. 12.
Commodity experts said that doubts about Johnson getting a Brexit deal to pass may continue to support safe haven gold buying, despite anticipation of a Federal Reserve interest-rate cut at the end of this month.
“Gold fell on the news PM Boris Johnson got a Brexit deal done with the EU, but that price action was short-lived,” said Edward Moya, senior market analyst at Oanda, in a daily research note.
“Gold is seeing buyers emerge and it seems it is only a matter of time before we see another run towards the $1,500 an ounce level,” he said.
Among other metals traded on Comex, December copper HGZ19, +1.04% added a penny, or 0.1%, to $2.603 a pound. January platinum PLF20, +0.07% added 40 cents, or less than 0.1, to $891.70 an ounce and December palladium PAZ19, +0.30% fell $9.30, or 0.5%, to $1,725.70 an ounce, on track to halt its record climb.