Gold futures pulled back below the $1,300-an-ounce level on Thursday, giving up their highest levels of the month, as the U.S. dollar regained its footing and investors appeared to shrug off political turmoil in the U.K. surrounding the country’s preparations for exiting from the European Union.
Gold for April delivery GCJ9, -1.03% on Comex fell $14.20, or 1.1%, to settle at $1,295.10 an ounce. On Wednesday, prices for the most-active contract marked the highest settlement since Feb. 28.
May silver SIK9, -1.79% dropped 28.5 cents, or 1.8%, to $15.171 an ounce.
The move to delay or even cancel March 29’s Brexit deadline boosted “risk-on sentiment, pulling some of the hot money out of gold derivatives,” Adrian Ash, head of research at BullionVault, told MarketWatch.
After gold futures settled Thursday, U.K. lawmakers voted to request an extension of the march 29 Brexit deadline. The move would require the unanimous approval of the EU’s other 27 governments. In electronic trading Thursday afternoon, April gold was at $1,296.30—a bit above the day’s settlement.
Read 15 days until Brexit: Here’s what happens next
Gold had climbed for a second day on Wednesday to post its highest close of the month as U.K. lawmakers ruled out the possibility of the country exiting the EU without an agreement on London’s future relationship with Brussels. But Parliament has yet to approve an agreement with the EU, with lawmakers having twice rejected a plan worked out by U.K. Prime Minister Theresa May.
For gold, “underlying physical demand is recovering as prices hold below February’s multi-month highs,” said Ash. “Whatever Band-Aid Brussels and London try to keep things together, the political fault-lines over trade, debt and sovereignty are widening.”
The British pound GBPUSD, +0.1586% jumped Wednesday after the vote to rule out a “no-deal” Brexit, helping to weaken the dollar.
On Thursday, the U.S. dollar was stronger versus most major rivals, with the ICE U.S. Dollar Index DXY, +0.27% a measure of the currency against six major rivals, up 0.2%. A stronger dollar can weigh on commodities priced in the unit because it makes them more expensive to users of other currencies.
Gold maintained losses after data Thursday showed first-time applications for unemployment benefits rose last week to a one-month high, though the level of layoffs in the U.S. remained extremely low.
Separately, data showed the cost of imported goods rose 0.6% in February, though the rise was driven largely by a 5% rise in the cost of oil, natural gas and other energy costs. Excluding fuel, import prices were unchanged. Sales of new U.S. homes dropped almost 7% in January to a 607,000 annual rate.
In other metals trading, May copper HGK9, -1.57% fell 4.65 cents, or 1.6%, to $2.889 a pound.
April platinum PLJ9, -1.96% fell $14.60, or 1.7%, to $827.10 an ounce after tacking on 1.2% a day earlier, while June palladium PAM9, +0.47% added $7.90, or 0.5%, to record settlement of $1,514.60 an ounce.
Fiat Chrysler Automobiles FCAU, -1.32% said late Wednesday that it’s recalling nearly 863,000 gasoline-driven vehicles in the U.S. after some didn’t meet federal emissions standards. “If this means that the catalytic converters have to be replaced, it could result in a boost in palladium consumption of some 77,000 ounces,” said analysts at Zaner Precious Metals.
Gold-backed exchange-traded fund SPDR Gold Shares GLD, -1.15% shed 1.1%.
Want news about Europe delivered to your inbox? Subscribe to MarketWatch's free Europe Daily newsletter. Sign up here.