Investing.com - Gold prices rose on Wednesday in Asia as traders opted for the safe-haven metal after U.K. Prime Minister Theresa May’s Brexit deal suffered another defeat in the British Parliament.
Parliament rejected May’s withdrawal deal for the second time on Tuesday, raising concerns of a “hard-Brexit” scenario before the planned departure date on March 29.
May would hold a vote on Wednesday on whether to leave the European Union without a deal and, if lawmakers reject that, they will then vote on whether to seek a limited extension to Article 50, the provision of the EU treaty under which the U.K. is withdrawing from the bloc.
Asian stocks were mostly in the red on Wednesday as a risk-off mood gripped investors, but the uncertainty spurred demand for the safe-haven gold.
Gold Futures rose 0.5% to $1,304,35 by 1:24 AM ET (05:24 GMT) on the Comex division of the New York Mercantile Exchange.
Meanwhile, the U.S. Dollar Index that tracks the greenback against a basket of other currencies edged up 0.1% to 96.968.
Gold was also supported by some soft February inflation data from the U.S., underlining the case for the Federal Reserve to maintain its current wait-and-see stance.
Speaking last Friday, Fed Chairman Jerome Powell justified the “wait-and-see approach” given that there was “nothing in the outlook demanding an immediate policy response and particularly given muted inflation pressures.”