Gold prices climbed on Tuesday as a lackluster Chinese manufacturing activity data pushed Asian markets down, rekindling worries about the health of the global economy.
Meanwhile, investors braced for a raft of euro zone data and U.S. Federal Reserve’s two-day policy meeting, which begins later in the day.
Spot gold was up 0.2 percent at $1,282.08 per ounce at 0318 GMT.
U.S. gold futures were up 0.2 percent at $1,283.90 an ounce.
“There is a broad bearish sentiment across Asia market opening this morning as a very disappointing China manufacturing PMI triggered a sell-off in currencies and emerging markets and equity markets, ” said Margaret Yang, an analyst with CMC Markets in Singapore.
Reading on the official Purchasing Managers’ Index (PMI) in for manufacturing unexpectedly fell to 50.1 in April from March’s reading of 50.5 stoking concerns about the economic state of China and pressuring Asian equities lower.
Gold is generally used by investors as a safe haven investment against economic and political concerns.
The metal has, however, come under pressure of-late as equity markets have hit record highs and most economic data from far and wide have pacified anxieties about the pace of global growth.
Gold is yet to overcome the bearish factors, and any rallies in the metal might will be short-lived, INTL FCStone analyst Edward Meir said in a note.
“We do not recommend establishing length at current levels on gold, given the lack of upside drivers. Although the dollar is not moving higher on the back of strong macro readings, it is not coming down either; neither are the U.S. long-term rates,” Meir added.
The metal had retreated from a more than one-week high yesterday after Wall Street stocks were propelled to a record high by data showing U.S. consumer spending increased by the most in more than 9-1/2 years in March.
The technical trend has turned more bearish for gold, CMC Markets’ Yang said.
Investors now await a raft of economic data from the euro zone and will also focus on the commencement of the Federal Open Market Committee (FOMC) meeting that will determine the future trajectory of interest rates in the U.S.
The U.S. central bank is widely expected to hold interest rates steady as policymakers balance recent stronger-than-expected U.S. economic growth against sluggish inflation.
Elsewhere, silver fell 0.1 percent to $14.89 per ounce, while platinum slipped 0.1 percent to $893.50.
Palladium, on the other hand, was up 0.2 percent at $1,372.69, having fallen by over 7 percent to bottom at $1,361.50 in the previous session.
Source: Reuters
