Gold holds ground as investors await clarity on Brexit

By Diptendu Lahiri

(Reuters) - Gold prices barely moved on Thursday as investors waited for clarity on Brexit after the European Union delayed a decision on granting an extension to Britain, and the U.S. central bank policy meeting for clues on its interest rate trajectory.

Spot gold <XAU=> was unchanged at $1,493.01 per ounce as of 0332 GMT. U.S. gold futures <GCcv1> were flat at $1,495.70 per ounce.

"Overall, gold is consolidating at the bottom of its medium-term range, implying that the next move is down assuming the mini trade deal goes through," OANDA analyst Jeffrey Halley said.

Halley pointed to a lot of stale long positions and said a breakdown through $1,460.00 is likely to see more long-term holders unwind their positions to lock in profit.

EU member states on Wednesday delayed a decision on whether to grant Britain a three-month Brexit extension, while Prime Minister Boris Johnson said if the deadline is deferred to the end of January he would call an election by Christmas.

Market participants await European and U.S. manufacturing numbers due later on Thursday, to gauge the health of the global economy, and a European Central Bank meeting, with no change to policy expected at President Mario Draghi's last meeting.

Investors also await the U.S. Federal Reserve's meeting on Oct. 29 and 30, where it is expected to reduce its benchmark interest rate for a third consecutive time this year.

Federal fund futures imply that traders see a 91.4% chance for a 25 basis point rate cut. [FEDWATCH]

Meanwhile, Asian shares pulled ahead on Thursday with corporate earnings buffeting trading as investors remained anxious about the business impact of the Sino-U.S. trade war while Brexit uncertainties kept overall sentiment in check.

The U.S.-China trade war has hit financial markets and forced most major central banks to cut interest rates this year.

The non-yielding bullion is often seen as a safer investment during times of political and financial uncertainty.

SPDR Gold Trust <GLD>, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.13% to 918.48 tonnes on Wednesday from 919.66 tonnes on Tuesday.

Elsewhere, silver <XAG=> was flat at $17.57 an ounce. Platinum <XPT=> was up 0.3% at $917.70 per, after scaling a more than three-week high earlier, while palladium <XPD=> edged up 0.6% to $1,752.09 per ounce.

(Reporting by Diptendu Lahiri in Bengaluru; Editing by Subhranshu Sahu)