One-kilogram gold bars are arranged at a Tanaka Holdings store in Tokyo, Japan. Picture: BLOOMBERG/AKIO KON
One-kilogram gold bars are arranged at a Tanaka Holdings store in Tokyo, Japan. Picture: BLOOMBERG/AKIO KON

Bengaluru — Gold scaled a near two-week peak on Wednesday, after reclaiming the key $1,300 level in the previous session, as investors opted for the safe-haven metal after British MPs rejected an amended exit deal, while a weaker dollar lent further support.

Spot gold was up 0.3% at $1,305.21/oz, as of 3.29am GMT, after touching its highest since March 1 at $1,305.69 earlier in the session.

US gold futures rose 0.5% to $1,305/oz.

The British parliament on Tuesday rejected Prime Minister Theresa May’s deal to quit the EU for a second time, deepening the country’s political crisis days before the planned departure date on March 29.

“The ongoing Brexit [uncertainty] has diminished risk appetite as investors are increasingly unnerved on the potential of a ‘hard Brexit’ deal,” said Benjamin Lu, analyst with Singapore-based Phillip Futures.

Asian share markets were mostly in the red on Wednesday as a risk-off mood gripped investors, while a frazzled pound awaited its fate ahead of yet another make-or-break parliamentary vote on Brexit.

British parliament will vote later in the day on whether to back a no-deal Brexit, and if that fails, a further vote on Thursday will decide whether to extend the Brexit deadline.

Meanwhile, US consumer prices rose for the first time in four months in February, but the pace of the increase was modest, resulting in the smallest annual gain in nearly two-and-a-half years, supporting the Federal Reserve’s ‘patient’ stance on US interest rate hikes.

The weak US inflation data suggests that policymakers may hold back from additional rate increase, ANZ analysts said in a research note.

Higher rates reduce investor interest in nonyielding bullion.

The dollar index dropped about 0.3% in the previous session on the tame US inflation data, making bullion cheaper for investors holding other currencies.

The disappointing US data, which followed a spate of weak reports from other economies, cascaded concerns on slowdown in global growth.

“We are optimistic on gold in long-term perspective. Markets are going to be more interested in safe-haven assets in light of volatility from a slowing economy,” Lu of Phillip Futures said.

Reflecting investor sentiment, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose about 0.4% on Tuesday. Holdings have risen after seeing heavy liquidations due to a sharp correction bullion prices.

Among other precious metals, silver gained 0.1% to $15.44/oz, after touching its highest since March 1 earlier in the session.

Palladium was down 0.3% at 1,537.47/oz, while platinum dipped about 0.2% to $835.97/oz.