Bengaluru — Gold fell on Thursday, breaking below the key technical support of $1,300, as the dollar edged up after UK law makers voted against a no-deal Brexit, while gains in European stocks further dented bullion’s allure.

Spot gold was down 0.8% at $1,298.25 an ounce as of 11.12am GMT, retreating from $1,311.07 hit on Wednesday, its highest since March 1. US gold futures also dipped 0.8%, to $1,298.40 an ounce.

“It is a combination of factors that have weighed on gold; weak Chinese data that is weighing on industrial demand for the metal, risk-on sentiment, rebounding yields, a higher dollar, and stronger UK stocks,” said Forex.com analyst Fawad Razaqzada.

Growth in China’s industrial output fell to a 17-year low in the first two months of the year pointing to further weakness in the world’s second-biggest economy that is likely to trigger more support measures from Beijing.

European shares rallied to five-month highs after Britain’s parliament removed a key source of uncertainty by rejecting a no-deal Brexit, while the dollar gained against a basket of currencies.

British law makers on Wednesday rejected leaving the EU without a deal and paved the way for a vote that could delay Brexit until at least the end of June. Britain’s parliament is due to vote later on Thursday on whether to delay Brexit beyond March 29.

“Participants in the gold market appear jaded by the Brexit issue and fed up with the whole business,” Commerzbank analysts said in a note.

On the flip side, gold prices have gained about 13% since touching more than one-and-a-half-year lows in August last year, with recent gains driven by the US Federal Reserve’s patient stance on monetary policy and escalating worries over a global economic slowdown.

Lower interest rates tend to pressure the dollar and increase investor interest in gold, while higher yields reduces the appeal for gold.

Modest inflation figures reinforced views that the Fed will be patient on future interest rate hikes, going into the central bank’s meeting next week. “I am positive on gold in the near term because central banks recently have turned more dovish than expected; interest rates are going to stay low for longer and there is potential for the dollar to be weaker,” Forex.com’s Razaqzada said.

Among other precious metals, palladium was down 0.2% at $1,552.76 an ounce, while platinum dipped 0.6% to $832.39 an ounce.