Investing.com - Gold pushed higher in North American trade on Wednesday, bouncing off a two-week low hit overnight, as investors assessed the possibility of more monetary easing by global central banks.
Gold for August delivery on the Comex division of the New York Mercantile Exchange slumped to an intraday low of $1,328.10 a troy ounce, a level not seen since July 1. It last traded at $1,342.50 by 12:35GMT, or 8:35AM ET, up $7.20, or 0.54%.
The Bank of England makes its policy announcement on Thursday, with some players expecting a rate cut.
Meanwhile, in Japan, Prime Minister Shinzo Abe told his economy minister on Tuesday to compile an economic stimulus package by the end of this month to revive a flagging economy.
The European Central Bank is also widely expected to take a dovish stance when it holds its policy review next week.
Expectations of monetary stimulus tend to benefit gold, as the metal is seen as a safe store of value and inflation hedge.
Market participants are also betting that the Federal Reserve would hold off on raising borrowing costs this year, despite last week's upbeat U.S. jobs report. Interest rate futures are currently pricing in a 33% of a rate hike by December.
The precious metal is sensitive to moves in U.S. rates. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
A day earlier, gold sank $21.30, or 1.57%, its biggest daily loss in three months, as sharp gains in global equity markets dampened demand for the yellow metal.
The precious surged to a more than two-year high of $1,377.50 last week, as fears surrounding global growth in wake of Britain’s vote to exit the European Union sent investors flooding into safe haven assets.
However, uncertainty over the U.K.'s political scene diminished with the imminent appointment of Home Secretary Theresa May as U.K. prime minister.
May is set to be installed as the U.K.'s new prime minister by Wednesday evening London time, replacing David Cameron who resigned after the Brexit vote last month.
She said she plans to set up a new government department to lead the process of withdrawing the country from the European Union. However, it remains unclear when Article 50, which initiates the withdrawal process from the EU, will be triggered.
Prices of the yellow metal are up nearly 27% so far this year amid fading expectations of a Fed rate hike and as expectations mounted that central banks around the world will step up monetary stimulus to counteract the negative economic shock from the Brexit vote.
Also on the Comex, silver futures for September delivery climbed 30.6 cents, or 1.52%, to trade at $20.47 a troy ounce during morning hours in New York, while copper futures advanced 4.3 cents, or 1.94%, to $2.256 a pound, the most since May 2.