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PRECIOUS-Gold rises on failed Brexit vote, Fed rate hike pause hopes

Published 16/01/2019, 06:37 pm
Updated 16/01/2019, 06:37 pm
© Reuters.  PRECIOUS-Gold rises on failed Brexit vote, Fed rate hike pause hopes

© Reuters. PRECIOUS-Gold rises on failed Brexit vote, Fed rate hike pause hopes

* Markets watching UK PM May's confidence vote

* More Fed policymakers call for patience in raising rates

* Spot gold in neutral $1,285-$1,299 range - technicals

* GRAPHIC-Gold vs currencies: http://tmsnrt.rs/1JxbO6Y

(Updates prices)

By Sethuraman N R

BENGALURU, Jan 16 (Reuters) - Gold edged up on Wednesday, supported by uncertainty around Brexit after lawmakers voted down British Prime Minister Theresa May's deal to leave the European Union, while calls grew for a pause in U.S. rate hikes.

Spot gold XAU= was up 0.2 percent at $1,291.49 per ounce, as of 0730 GMT.

U.S. gold futures GCv1 were up 0.2 percent at $1,290.90 per ounce.

An increased chance of a disorderly Brexit is supporting gold's safe-haven appeal due to a risk-off sentiment, said Benjamin Lu, analyst with Phillip Futures.

"Gold is holding pretty well despite competing influence from U.S. equity markets."

British lawmakers defeated May's Brexit divorce deal by a crushing margin, triggering political chaos that could lead to a messy exit from the EU or even to a reversal of the 2016 decision to leave. are now watching a confidence vote on May's government by lawmakers later in the day.

"We are seeing weakness in economy in China as well as the U.S. and markets are expecting that Fed might slow interest rates in the near future," Lu said.

In separate appearances on Tuesday, various Fed policymakers agreed the central bank should pause further rate hikes until it is clear how much the U.S. economy will be held back by larger risks like slowing growth in China and narrower ones like the ongoing budget stalemate in Washington. tends to gain on expectations of lower interest rates, as they reduce the opportunity cost of holding non-yielding bullion. Lower interest rates also tend to weigh on U.S. yields and the dollar, in which gold is priced.

The U.S. economy is taking a larger-than-expected hit from a partial government shutdown, White House estimates showed on Tuesday, with the longest such shutdown in U.S. history dragged into its 26th day. data points from the U.S. have not been so encouraging and markets have got one more tension after the rejection of Brexit voting," said Ajay Kedia, director at Kedia Commodities in Mumbai

"Gold will find support in the coming sessions. But prices need to break above the key $1,300 level before making a more meaningful move."

Spot gold has gained more than 11 percent since hitting a 1-1/2-year low in mid-August at $1,159.96, mostly due to tumultuous stock markets and a weakness in the U.S. dollar. But, prices have been stuck in a $20 range for the past couple of weeks.

Spot gold remains neutral in a range of $1,285-$1,299 per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao. other precious metals, palladium XPD= rose 0.4 percent to $1,323.50 an ounce. It hit a record high at $1,342.43 last week.

Platinum XPT= rose 0.3 percent to $795.50, while silver XAG= was steady at $15.57 an ounce.

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