Gold hit nearly a two-week high on Wednesday as tepid U.S. economic data reinforced views the Federal Reserve would be patient on monetary policy, with bullion`s appeal also bolstered by uncertainty over a Brexit deal ahead of a key vote.
Spot gold was trading 0.5 percent higher at $1,307.65 per ounce as of 11:23 a.m. EDT (1523 GMT), its highest level since March 1.
U.S. gold futures were trading 0.8 percent higher at $1,307.90 per ounce.
"The U.S. PPI numbers came weaker-than-expected. This, coupled with the Brexit news, is helping gold," said Bob Haberkorn, senior market strategist at RJO Futures
Domestic producer prices in the United States rose 1.9 percent on a year-over-year basis in February, the smallest annual increase since June 2017.
Tepid inflation and disappointing producer prices data this week support the Fed`s stance of keeping interest rates on hold, denting the dollar and lifting demand for non-interest-yielding gold. The U.S. central bank`s rate-setting committee will issue its next policy statement following its March 19-20 meeting.
"Traders are buying into the fact that they are expecting a very dovish U.S. Fed announcement," Haberkorn said.
Gold breached the psychologically significant $1,300 level on Tuesday, helped by a weaker dollar, with demand for the U.S. currency taking a hit after Tuesday`s softer-than-expected U.S. February inflation data and falling government bond yields.
"Metals technically have more upside to go just on rising geopolitical uncertainty, specifically what`s going on in Britain," Haberkorn added.
Prime Minister Theresa May lost a second attempt for her Brexit plan, plunging Britain deeper into a political crisis before the country`s planned March 29 departure from the European Union, and denting risk appetite.
However, European shares regained some ground on Wednesday, buoyed by optimism that British lawmakers were set to rule out a no-deal Brexit. Britain`s parliament is due to vote at 1900 GMT on whether the country should leave the EU on March 29 without a deal.
On the technical front, "gold is now heading towards the next potential resistance around $1313, a former support level," said Forex.com analyst Fawad Razaqzada.
However, if the $1,300 support level gives away again, "we could see a more significant sell-off this time around."
Concerns over slowing global economic growth were also bolstering appeal for gold, considered a safe store of value during economic or political uncertainties, analysts said.
Reflecting sentiment, holdings in the world`s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose about 0.4 percent on Tuesday, a second straight day of gains.
Among other precious metals, palladium climbed 0.2 percent to $1,543.92 per ounce, while platinum rose 0.8 percent to $843.94 .
Silver dipped 0.1 percent to $15.43 per ounce.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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