Investing.com - Gold prices fell on Wednesday in Asia as traders digested the latest development on Brexit and weak U.S. data.
Gold Futures for December delivery slipped 0.4% at $1,482.65 per ounce by 1:08 AM ET (05:08 GMT) on the Comex division of the New York Mercantile Exchange.
The Institute of Supply Management’s manufacturing PMI posted its lowest reading in a decade, falling to 47.8 for September and disappointing consensus forecasts of a rebound above 50.
Prices of the yellow metals initially gained following the release of the manufacturing data, as the weak reading led to broad risk aversion on Wall Street and a rush into safe havens.
The Federal Reserve might be prompted to cut interest rates for a third time this year, providing further support to gold prices.
On the other hand, Brexit developments remained in focus. U.K. Prime Minister Boris Johnson is set to reveal his final Brexit offer to the European Union later in the day. He made it clear that Britain will not negotiate further should the deal is not engaged and will leave on October 31.
“My friends, I am afraid that after three-and-a-half years people are beginning to feel that they are being taken for fools. They are beginning to suspect that there are forces in this country that simply don’t want Brexit delivered at all,” he will say, according to extracts released by his office.
“Let’s get Brexit done on October 31 so in 2020 our country can move on.”
Despite the fall today, some analysts believe gold is on its way back up.
“The combination of some 75 technical analysis trading signals suggests that 43% of signals are still tilted towards the long side in gold. In fact, chart signals in gold present the most compelling case in a cross-asset basket of securities, with the yellow metal holding the crown for the highest absolute percentage of signals pointing long on a 60 (day) moving average basis,” TD Securities said in a note Tuesday.
“This suggests that a marginal chart signal prompted extremely skewed positioning to liquidate some length, but our positioning analytics suggest that this move is more likely to be tied to a minor shakeout in length than to a major change in positioning,” it added.