Gold’s spot price returned to the level of $1295 per ounce, although last night bulls were actively storming $1310. However, the assault turned into a complete surrender of buyers. Current support level may stop this local bear wave. It is possible that black gold will begin to consolidate near $1295, as it has been doing for most of January.
Main fundamental uncertainty is Brexit. Tuesday, the parliament rejected May’s proposal for the second time. This caused local panic and as a consequence, gold growth, due to the “hard Brexit” scenario. On Wednesday, House of Commons deputies rejected idea of leaving the EU without an agreement with Brussels. Later on Thursday, they considered the issue of postponing Brexit to a later date.
On the other hand, the chairman of the European Council, Donald Tusk, said that if London decides to change its approach to the implementation of Brexit, he will turn to the EU countries with a proposal to postpone the terms of Brexit as well. The next EU summit will be held 21 – 22 of March. British exit from the EU is scheduled for March 29. Thus, by the end of the month, this factor is likely to play a deterrent role for both bulls and bears, until countries agree.