Gold prices were consolidating during Thursday European morning trading, holding below the 28-month highs reached in the previous session but poised for further gains, traders said.
The market continues to benefit from the influx of safe-haven investment flows in the wake of the UK vote to exit the EU, which has led to heightened uncertainty over global economic prospects and increased risk aversion.
Given that the short-to-medium-term outlook will remain uncertain, gold has the fundamental support to underpin advances allied to constructive technicals – the overhead target is the psychological $1,400 level.
Spot gold was indicated at $1,366.50/1,366.80 per ounce, down just $0.50 from yesterday, when prices peaked at $1,375.25.
In wider markets, the mood was better – the UK FTSE 100 share index was up some 1.3 percent, reversing yesterday’s losses, while sterling was a steadier 1.2980 against the dollar, having climbed from 31-year lows.
The greenback was also steadier at around 1.1085 against the euro. Overnight, the release of the Federal Reserve’s June meeting minutes showed that most Fed members were cautious about adjusting interest rates following poor US labour data and the UK referendum.
On the data side today, the focus moves towards US employment figures ahead of Friday’s June non-farm payrolls report. The US Challenger job cuts, ADP non-farm employment change, weekly unemployment claims and crude oil inventories are due later.
In other metals, silver was looking to consolidate above the $20 level, holding at $20.08/20.10 per ounce, an eight-cent loss.
Similarly in the PGMs, platinum was marking time after running up one-year highs of $1,091 on Wednesday. It was indicated at $1,083/1,090 per ounce, a $3.50 loss, while palladium stood at $606/614, a $1.50 loss.
(Additional reporting by Vivian Teo in Singapore, editing by Mark Shaw)