Investing.com - Gold prices were lower in North American trade on Thursday, holding on to modest overnight losses, as investors continued to digest the political and economic aftermath of the U.K.’s decision to leave the European Union.
Former London mayor Boris Johnson abruptly pulled out of the race to become Britain's next prime minister on Thursday, in a shock move that upturned a political order shaken by last week's vote to leave the European Union.
Meanwhile, Britain’s Justice Secretary Michael Gove, one of the main campaigners to take Britain out of the EU, said on Thursday he would run to become prime minister. Interior Minister Theresa May, who campaigned to remain in the EU, also announced her candidacy to lead the party.
Other Conservative Party politicians to declare they are standing to replace Cameron so far are Welsh Secretary Stephen Crabb and Defence Secretary Liam Fox.
Gold for August delivery on the Comex division of the New York Mercantile Exchange shed $5.15, or 0.39%, to trade at $1,321.75 a troy ounce by 12:45GMT, or 8:45AM ET. A day earlier, prices tacked on $9.00, or 0.68%.
Prices of the yellow metal surged to a 27-month peak of $1,362.60 last Friday, after a shock U.K. vote to exit the European Union sent investors flooding into bullion and other safe haven assets.
The news raised concerns that other countries might leave the union and that global growth would come under significant pressure, while the actual timeframe of the U.K. departure from the EU remained unclear.
But so far the U.K. has refrained from invoking Article 50, the treaty measure that would jump start the two year deadline for the U.K. to leave the European Union.
Investors will be watching a speech by Bank of England Governor Mark Carney at 15:00GMT, or 11:00AM ET, when he is expected to address concerns over the U.K.'s decision to leave the EU.
The precious metal is up almost 25% for the year to date, boosted by concerns over global growth in wake of the Brexit vote and as market players pushed back expectations for the next U.S. rate hike.
Market players all but ruled out further rate hikes by the Federal Reserve this year in the aftermath of Britain’s shock vote to leave the EU. In fact, futures markets are now reflecting a chance that the Fed could actually cut interest rates before the end of the year, instead of hiking them.
According to the CME Fed Watch tool, there’s currently a 0% probability of a Fed rate hike in July and a 3% probability of a rate cut.
Data released earlier showed that weekly jobless claims rose by 10,000 last week to 268,000. Analysts expected jobless claims to increase by 9,000 to 267,000 from the previous week’s total of 258,000.
A report on business activity in the Chicago region is due at 13:45GMT, or 9:45AM ET.
Elsewhere on the Comex, silver futures for September delivery inched up 10.6 cents, or 0.58%, to trade at $18.50 a troy ounce during morning hours in New York, while copper futures tacked on 0.2 cents, or 0.09%, to $2.188 a pound.