Investing.com - Gold prices were higher in European trade on Wednesday, bouncing back from the prior session’s losses as 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.
Gold for August delivery on the Comex division of the New York Mercantile Exchange tacked on $5.30, or 0.4%, to trade at $1,323.20 a troy ounce by 06:45GMT, or 2:45AM ET. A day earlier, prices dipped $6.80, or 0.51%.
According to the CME Fed Watch tool, there’s currently a 0% probability of a Fed rate hike in July and a 5% probability of a rate cut. Odds for a September rate cut stood at 10.5%.
In the first of Fed policymakers to comment since the shock vote in Britain last week, Governor Jerome Powell said on Tuesday that the Brexit referendum had shifted global risks "to the downside," potentially posing a new threat to the U.S. central bank's outlook.
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.
Outgoing U.K. Prime Minister David Cameron met with his European counterparts in Brussels on Tuesday to discuss the country's position following the vote.
Cameron reiterated that he would not invoke Article 50 of the Lisbon Treaty, which sets in motion the process of withdrawing from the EU, an action he will leave to his successor.
The heads of the EU's 27 other member states will continue their meeting on Wednesday without the U.K. present.
The precious metal is up almost 25% for the year to date, boosted by concerns over global growth and as market players pushed back expectations for the next U.S. rate hike.
Investors looked ahead to key U.S. data later in the day to gauge the health of the world's largest economy. The Commerce Department will release its core personal consumption expenditure (PCE) index for May, along with personal income and spending for the same month at 12:30GMT or 8:30AM ET. At 14:00GMT or 10:00AM ET, the National Association of Realtors will release May pending home sales.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.2% at 96.00, moving further away from a three-month high of 96.86 hit earlier in the week.
Elsewhere on the Comex, silver futures for September delivery jumped 42.6 cents, or 2.38%, to trade at $18.31 a troy ounce during morning hours in London, while copper futures shed 0.3 cents, or 0.16%, to $2.172 a pound.