Gold fell yesterday as the dollar regained some ground and uncertainty over Brexit eased, but the metal held close to a two-week high hit in the previous session as tepid US inflation data cemented expectations that the Federal Reserve will hold rates.
Spot gold was down 0,4 percent at $1,303.83 per ounce as of 0416 GMT, after touching its highest since March 1 at $1,311.07 on Wednesday.
US gold futures also dipped 0.4 percent, to $1,304.10 an ounce.
“The dollar is playing a main role in driving gold prices down during Asia trading hours. The dollar has been falling for the last four sessions and we are seeing a small rebound today,” said Margaret Yang, a market analyst with CMC Markets, Singapore.
Yang said the safe-haven demand for the metal as a hedge against Brexit uncertainty declined after British legislators rejected leaving the EU without a deal.
The legislators are now widely expected to vote, later in the day, to delay Britain’s departure from the bloc, currently scheduled for March 29.
“The markets are assessing the landscape in Europe and UK after the vote. If we do see the deadline pushed out, there wouldn’t be a huge impact (in gold prices), but the reaction will be great if we see some sort of deal agreed to in the UK parliament,” ANZ analyst Daniel Hynes said.
The dollar was higher against major currencies, after falling the most in two weeks in the previous session on soft US economic data.