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Gold Edges up as Geopolitics Take Control of Trade

Investing.com – Investors managed to push gold higher Thursday instead of completely embracing risk, as doubts remained about whether the U.K. will get parliament ratification for its Brexit deal, but Turkey agreed to a ceasefire in Syria.

U.S. gold futures for December delivery settled up $4.30, or 0.3%, at $1,498.30 per ounce.

“Gold is not quite easing on the Brexit headline and this is a clear sign that there are worries about the deal passing,” said George Gero, precious metals analyst at RBC Wealth Management in New York. He added, “People also want a hedge against other global troubles and financial worries, like the IMF’s caution that we’ll have the slowest growth this year since the financial crisis.”

U.S. gold futures for December delivery settled up $4.30, or 0.3%, at $1,498.30 per ounce.

But gold and other safe havens later lost some of their charm on reports that Turkey had agreed to a five-day ceasefire in northeast Syria to allow for withdrawal of Kurdish forces. U.S. Vice President Mike Pence announced that deal after talks with Turkish President Tayyip Erdogan on Thursday.

In post-settlement trade, gold futures were up just $1.45, or 0.1%, at $1,495.45, at 3:27 PM ET (19:27 GMT) after scaling $1,501.05 at the intraday high. Spot gold was up $1.83, or 0.1% higher, at $1,491.86.

The spot price of palladium reached an all-time high of 1,786.25 an ounce, improving over Wednesday’s record of $1,780.40 per ounce, before trading down $9.80, or 0.6%, at $1,760.50.

Palladium futures, traded on the New York Mercantile Exchange’s COMEX division, registered its own record high at $1,750, erasing Wednesday’s $1,722.20 peak. It settled the day down $4.30 at $1,730.70.

Palladium, used in vehicle exhausts to reduce harmful emissions, has rallied more than $300 since early August, when it touched the lowest in nearly two months.

Gold fell earlier in the day after Britain and the European Union agreed to a new Brexit deal.

It rebounded later as doubts emerged on U.K. Prime Minister Boris Johnson’s chances of winning parliamentary ratification for the deal. The Northern Irish Democratic Unionist Party (DUP), whose 10 parliamentary votes Johnson would need to get any deal approved by the Commons, has so far balked at the notion of an effective customs border separating Northern Ireland from the rest of Britain.

Haven appetite was also supported by a barrage of weak U.S. economic data that gave fresh ammunition to those calling for further interest-rate cuts from the Federal Reserve when its policy-making committee meets in just under two weeks’ time.

Industrial production in the U.S. fell 0.4% in September, after an upwardly-revised gain of 0.8% in August, adding to evidence of an ongoing slowdown across the country. Earlier, the Philadelphia Fed’s manufacturing index fell to its lowest in five months, while data from the housing market also disappointed, as housing starts slowed more than expected, while initial jobless claims again edged higher.

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