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Spot gold was steady at $1,289.70 per ounce at 0442 GMT.

U.S. gold futures were up 0.1 percent at $1,289.40 per ounce.

·       "The safe haven appeal is quite strong as there are rising possibilities of a disorderly Brexit," said Benjamin Lu, analyst with Phillip Futures, adding the metal was holding pretty well despite competing influence from U.S. equity markets British lawmakers defeated May's Brexit divorce deal by a crushing margin, triggering political chaos that could lead to a messy exit from the EU or even to a reversal of the 2016 decision to leave.

"We are seeing weakness in economy in China as well as the U.S. and markets are expecting that Fed might slow interest rates in the near future," Lu said.

·       In separate appearances on Tuesday, Fed policymakers from across the spectrum of views agreed the central bank should pause further rate hikes until it is clear how much the U.S. economy will be held back by larger risks like slowing growth in China and narrower ones like the ongoing budget stalemate in Washington.

·       The U.S. economy is taking a larger-than-expected hit from a partial government shutdown, White House estimates showed on Tuesday, with the longest such shutdown in U.S. history dragged into its 26th day.

·       "The scaling back of (Fed rate hike) expectations removes a key drag on prices that hindered much of the upside momentum in 2018," Standard Chartered said in a research note.

"The macro backdrop is shaping up to be more supportive for gold. However, we would caution restraint for now, as inflationary risks have been contained, U.S. dollar weakness stalled in recent sessions and equity markets have stabilised."

·       Spot gold has gained more than 11 percent since hitting a 1-1/2-year low in mid-August at $1,159.96, mostly due to tumultuous stock markets and a weakness in the U.S. dollar.

·       Spot gold remains neutral in a range of $1,285-$1,299 per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao.

·       Technically, February gold futures bulls still have the overall near-term technical advantage. A two-month-old price uptrend is still in place on the daily bar chart. The recent sideways pause is not bearish. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,260.00. First resistance is seen at this week’s high of $1,296.60 and then at the January high of $1,300.40. First support is seen at today’s low of $1,286.50 and then at last week’s low of $1,280.20

·       Gold prices will have a better year in 2019, according to INTL FCStone, which projects much higher price levels once the $1,300level is breached.

“Gold [will] do better this year than it did in 2018. During 2019, we see gold trading roughly between $1,200-$1,400,” INTL FCStone’s Edward Meir said in the Monthly Market Overview report published on Tuesday. “Especially if prices manage to bust through psychologically important $1,300 resistance and make a stab at testing the 2018 highs.”

·       GOLD MAY FALL ON FED BEIGE BOOK

Looking ahead, the Fed’s Beige Book survey of regional economic conditions is on tap. A relatively upbeat tone echoing improvement in US economic data relative to consensus forecasts since the beginning of the year may force a rethink of the dovish shift in rate hike bets, boosting the US Dollar at gold’s expense.