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Gold Dips but Stays Not Too Far From $1500 on Brexit Help

Investing.com - Gold longs have rediscovered their friendship with Brexit fighters as they await the Federal Reserve.

Prime Minister Boris Johnson’s growing frustrations over his inability to pull Britain out of the European Union helped futures and spot prices of the yellow metal stay not too far from the $1,500 target of longs, ahead of next week’s Federal Reserve policy decision.

U.S. gold futures for December delivery settled down $6, or 0.4%, at $1,488.10 per ounce.

Spot gold, which tracks live trades in bullion, was down $5.88, or 0.4%, at $1,484.69 by 2:25 PM ET (18:25 GMT).

“Volatility in gold is here to stay,” said Eli Tesfaye, precious metals strategist at RJO Futures in Chicago. “The public likes gold now . . . with the dragged out Brexit vote, China trade deal with China and other seasonal factors all adding to give the bulls an edge.”

Technically, gold still had a shot at returning to its previous $1,500 perch, Tesfaye said.

“The battle line is drawn at $1,500, which in my view will be decisive.”

Johnson’s plan to lead Britain out of the European Union at the end of this month hit another roadblock when the speaker of the House of Commons rejected his attempt to hold a new vote of lawmakers on his Brexit deal.

On the US-China front, a document published on Monday showed the appeals judges at the World Trade Organization ruled in July that the United States did not fully comply with an Obama-era WTO ruling. That could open Washington to Chinese sanctions if it does not remove certain U.S. tariffs that break the watchdog’s rules.

The White House hopes to have an agreement in writing for presidents Donald Trump and Xi Jinping to sign when they are in Chile for the Asia-Pacific Economic Cooperation meetings scheduled for Nov. 11-17.

Trump said earlier this month that he had agreed in principle to a “phase one” trade deal with China’s Vice Premier Liu He after high-level negotiations in Washington.

The deal includes China agreeing to raise its U.S. agricultural purchases to between $40 billion and $50 billion from $8 billion to $16 billion, in addition to making reforms on intellectual property and financial services, Trump said.

But Liu, speaking in China on Saturday, said that, while “concrete progress” was made in many areas, the negotiations must continue on an “equal basis” to achieve a deal.

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