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 US rate hikes. Spot gold was up 0.2 percent at $1,291.49 per ounce, as of 0730 GMT. US gold futures 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 US equity markets." "We are seeing weakness in economy in China as well as the US 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 US economy will be held back by larger risks like slowing growth in China and narrower ones like the ongoing budget stalemate in Washington. "The data points from the US 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.
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 US 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.