Investing.com - The U.K.'s political and economic problems and a no-confidence vote on Prime Minister Theresa May after her failed Brexit deal vote are keeping alive gold bugs' hopes of recapturing highs of above $1,300 per ounce, even as China's attempts to steady its economy tamp down safe havens.
Gold futures for February delivery on the Comex division of the New York Mercantile Exchange settled up $5.40, or 0.4%, at $1,293.80 per ounce after reaching a session high of $1,295.
Bullion's spot price rose by $4.21, or 0.3% to 1,293.59 by 1:32 PM ET (18:32 GMT), peaking at $1,295.03 for the day.
Both futures and bullion fell on Tuesday after risk appetite returned to financial and commodity markets after Beijing's National Development and Reform Commission said it planned to make the first quarter “a good start” for the economy, coded language for stimulus.
Analysts believe there could be as much as 2 trillion yuan ($296.21 billion) worth of cuts in federal taxes and fees under the Chinese stimulus measures to be unveiled in coming months.
The euphoria over the Chinese announcement quickly fizzled on Wednesday, replaced by fresh concerns about a possible global recession. But gold prices, while higher, remained away from this year's highs of above $1,300.40 hit on Comex futures on Jan. 4.
"The price of gold is seemingly stuck in the mud despite all the negative news heard around the globe," Walter Pehowich, industry analyst and executive vice-president at Dillon Gage Metals in Addison, Texas, wrote in a Wednesday market commentary, referring to trading range of between $1,285 and $1,295. "So for the time being, gold investors are patiently waiting for some news that will bring the price through the next level of resistance at $1,303 in the spot price."
Aside from the three-week long partial U.S. government shutdown and fears of a global recession, leading the charge for gold bugs were Brexit negotiations, which were "going nowhere", Pehowich added.
The no-confidence vote against Prime Minister May, beginning 2 PM ET (19:00 GMT), comes after the British leader suffered the worst parliamentary defeat in nearly 100 years over her proposed deal for U.K.'s exit from the EU. The clock now ticks toward March 29 deadline for Britain to leave the bloc with or without an organized plan.
In other Comex trading, palladium futures jumped by $39.75, or 3.1%, to $1,316.85.
Platinum futures rose by $8.95, or 1.1%, to $809.05.
Silver futures gained 1.7 cents, or 0.1% to $15.64.
In base metals, copper futures rose 3.6 cents, or 1.4% to $2.67 per pound.