On Wednesday, gold increased in European trade, as investors went bargain hunting after prices of the precious metal declined to a two-week low.
Delivery of gold for August on the Comex division of the NYMEX fell to an intraday low of $1,328.10 a troy ounce—a level not met since July 1. It last traded at $1,341.65 by 06:49GMT or 2:49AM ET, up by $6.35 or 0.48 percent.
After the significant advance in the global equity markets, the demand for gold declined. The yellow metal lost 1.57 percent to $21.30, marking the biggest drop since April.
Gold upsurged to over two-year peak of $1,377.50 during the previous week, as doubt surrounding global development in the wake of Britain’s poll to leave the EU prompted investors to flood into safe haven assets.
Although, with the imminent appointment of Home Secretary Theresa May as U.K. prime minister, doubt over the U.K.'s political scene lessened. Home Secretary Theresa May is scheduled to be inaugurated as prime minister by Wednesday evening, replacing David Cameron, who resigned following the Brexit vote in the previous month.
Theresa May stated she plans to establish a new government department to guide the procedure of withdrawing the country from the EU. However, it stays uncertain when Theresa May will initiate Article 50, which starts the withdrawal procedure from the European Union.
Prices of the yellow metal increased approximately 27 percent so far this year during fading anticipations of a Fed rate hike and as expectations that central banks around the globe will improve monetary stimulus to offset the negative economic blow from the Brexit vote increase.
On Tuesday, two senior Fed officials stated that in spite of the previous week’s better-than-expected U.S. nonfarm payrolls data, the central bank should be in no hurry to increase interest rates.
Market players anticipated comments from a barrage of Fed representatives later in the session to judge the balance of opinion among policymakers on the view of additional rate hikes.
Dallas Fed President Kaplan is scheduled to speak about the world economy at the World Affairs Council of Houston at 13:00GMT, or 9:00AM ET. Later in the day, Philadelphia Fed President Patrick Harker and Cleveland Fed President Loretta Mester are also set to give statements.
Elsewhere on the Comex, delivery of silver futures for September increased 29.1 cents or 1.44 percent, to trade at $20.46 a troy ounce throughout morning hours in London, while copper futures advanced 3.9 cents or 1.76 percent, to $2.252 a pound.