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Gold prices edged up on Wednesday in Asia as political uncertainty in the U.K. boosted demand for the safe-haven metal.
Gold futures for February delivery on the Comex division of the New York Mercantile Exchange was up 0.2% at $1,290.35 a troy ounce by 12:40 AM ET (05:40 GMT).
The gain in gold prices came after U.K. Prime Minister Theresa May’s Brexit plan was voted down by a hefty margin.
The House of Commons voted 432 versus 202 against Prime Minister May’s Brexit Deal on Tuesday. Following the defeat, May now faces a confidence vote in Parliament later today.
If nothing is approved by March 29, Britain would make a “no-deal” departure from the bloc, which could pose dire economic risks.
Meanwhile, in separate appearances, several Federal Reserve officials agreed on Wednesday in Asia that the central bank should halt further rate hikes until it is clear how much the U.S. economic outlook will be held back by “larger risks”, including a slowing Chinese economy and the continuing U.S. government shutdown.
Higher interest rates tend to weigh on demand for gold, which doesn’t bear interest, in favour of yield-bearing investments.
After the Fed hiked rates four times in 2018, investors now expect the U.S. central bank to halt its monetary tightening policy this year as risks to the U.S. economy mount.
Elsewhere, global equities recovered this week following reports that China is stepping up monetary and fiscal stimulus efforts to support its sagging economy.
On Tuesday, China vowed tax cut on a larger scale to help support its slowing economy on Tuesday, while the People’s Bank of China (PBOC) injected a record CNY 560 billion via reverse repo operations earlier today.
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