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Gold ascends on Brexit jitters
On Tuesday, gold rallied because uncertainty over the latest developments in Britain’s departure from the EU backed safe haven demand and traders looked ahead for American inflation data to underpin the Fed’s pledge to remain on hold.
On the Comex exchange, April delivery gold futures went up by 0.41% concluding the trading session at $1,296.35 a troy ounce.
Many experts are assured that Theresa May will fail to achieve the votes required to underpin her withdrawal pact.
If UK lawmakers reject May's agreement, she has pledged a vote on Wednesday on whether to depart from the EU without a deal and, if they vote down it, then there will be a vote for a limited delay to Brexit.
On Tuesday, the uncertainty stimulated demand for the yellow metal even as volatility reigned in the Forex market.
As markets closely watch developments, traders will wait for American inflation data expected to show up at 8:30 AM ET.
Market experts actually expect American consumer prices to match February’s surge, underlining the case for the US major financial institution to stick with its current wait-and-see stance.
Financial markets were still skeptical that the Federal Reserve could proceed with its rate lift in 2019, especially after the employment report revealed poor job creation in February. By the way, Fed fund futures exclude such a move and place the likelihood at above 10% that the next move would be a cut.
Apparently, the pause in policy tightening is beneficial for the yellow metal because it decreases the opportunity cost of holding non-yielding bullion.
In addition to this, silver futures managed to rally by about 0.97% hitting $15.4223 a troy ounce.
Palladium surged by 1.28% showing $1,500.90.
As for copper, this metal inched up by up to 1.10% ending up with $2.933 a pound.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.