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Gold Prices Ease As Risk Appetite Improves

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Gold Prices Ease As Risk Appetite Improves
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Gold prices fell slightly on Wednesday even as the U.S. dollar extended its fall on the back of weak manufacturing data, uncertainties over the Brexit outcome and the prolonged Sino-U.S. trade spat.

Spot gold declined 0.65 percent to $1,537.82 per ounce, after hitting its highest level since April 2013 at $1,554.56 last week. U.S. gold futures were down 0.6 percent at $1,546.45 an ounce.

There is some improvement in risk appetite as investors cheered positive political developments in Italy, Britain and Hong Kong.

Italian bonds climbed for a third day after Prime Minister-designate Giuseppe Conte won backing to form a new government.

British lawmakers will now move to pass a bill that will make a no-deal Brexit illegal after British Prime Minister Boris Johnson suffered a humiliating defeat over his Brexit strategy.

Elsewhere, Hong Kong leader Carrie Lam is set to announce the formal withdrawal of a controversial extradition bill that triggered months of unrest.

On the economic front, the euro zone business growth improved slightly since July, while the region’s retail sales declined at the fastest pace seen so far this year in July, separate reports showed.

Data released earlier in the day showed that activity in China’s services sector expanded at the fastest pace in three months in August.

The focus now shifts to a European Central Bank meeting next week, with investors expecting a stimulus package including a rate cut.

The material has been provided by InstaForex Company – www.instaforex.com