BENGALURU: Gold was little changed on Tuesday after British Prime Minister Theresa May's Brexit deal was rejected, as a rising dollar and stronger stock market dented the precious metal's appeal.
Spot gold was unchanged at $1,289.35 per ounce by 5:02 p.m. EST (2202 GMT), while US gold futures settled down 0.2 percent to $1,288.40.
British lawmakers defeated May's Brexit divorce deal by 230 votes on Tuesday, triggering political upheaval that could lead to a disorderly exit from the European Union or even to a reversal of the 2016 decision to leave.
"The Brexit deal not going through did throw a geopolitical uncertainty, but the fact that the dollar is up and equities are strong has dampened any rally gold would have had after the news," said Bob Haberkorn, senior market strategist at RJO Futures.
Had there been news of an agreement, the markets would have been surprised, Haberkorn said, adding "What happened today was expected and it absolutely was already priced in."
Major world stock markets rose on Tuesday, supported by China's plan to introduce policies to stabilise a slowing economy.
Also weighing on gold was a stronger greenback, which gained after weak economic data from Germany impaired the euro, making the metal more expensive for holders of other currencies.
However, lingering concerns triggered by weak economic data from across the globe raised doubts about the condition of the global economy, keeping gold's underlying appeal intact, analysts said.
"Right now, there is a lot of insecurity about the stock markets, global economy and trade," said Miguel Perez-Santalla, vice president of Heraeus Metal Management in New York.
"These concerns are holding gold up and one wrong move can pop gold up above the $1,300 level."
Gold has been on a good run over the past few weeks, having hit its highest since mid-June on Jan. 4 at $1,298.42 an ounce, drawing support from a dovish stance from the Federal Reserve.
Fed Chair Jerome Powell earlier this month said the US central bank had the potential to be patient with its monetary policy.
Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion.
"We view 2019 as a year of assets rebalancing and fresh money to flow into gold," MKS PAMP Group said in a note, forecasting bullion to average $1,335 an ounce in 2019.
Palladium was unchanged at $1,317.50 an ounce, continuing to trade at a premium to gold but hovering below an all-time peak of $1,342.43 hit last week.
"Palladium has been in a supply deficit for several years and is set to remain so in 2019," MKS PAMP said.
Platinum rose 0.3 percent to $796.00 per ounce, while silver was unchanged at $15.57.
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