Investing.com -Gold prices gained in Asia on Wednesday with investors noting political risk and also watching copper on prospects of a strike by workers in Chile at the world's largest mine.
Gold Futures futures for April delivery on the Comex division of the New York Mercantile Exchange inched up 0.03% to $1,211.75 a troy ounce. Also on the Comex, silver futures for March delivery slipped 0.15% to $17.517 a troy ounce and copper futures fell 0.04% to $2.725 even with markets in China, the world's top importer of the industrial metal, closed through Thursday to mark the Lunar New Year.
Copper surged overnight as union workers at Chile's Minera Escondida, the biggest copper mine in the world, are planning to vote today on approving a strike as early as Friday after negotiations for a collective agreement seem to have fallen apart, according to reports. Escondida is majority owned by BHP Billiton (LON:BLT), with Rio Tinto (LON:RIO) holding a minority stake.
China's official manufacturing Purchasing Managers' Index (PMI) continued in expansion in January, as the mainland economy shows signs of stabilizing, reaching 51.3, down slightly from 51.4 in December, but still better than a Reuters poll forecasting 51.2. A reading above 50 indicates expansion, while a reading below signals contraction.
Overnight, the dollar held weaker on Tuesday with comments on trade from the Trump administration weighing on sentiment and investors looking ahead to the latest Fed views on rates on Wednesday.
Overnight, gold made strong gains on Tuesday on political risk as U.S. trade policies came into focus anew and investors were cautious ahead of the latest Fed views on rates due this week.
Gold prices were sharply higher in North American morning trade on Tuesday, extending overnight gains as the dollar sank amid uncertainty over President Donald Trump's policies as the president dismissed acting U.S. Attorney General Sally Yates late Monday after she ordered Justice Department lawyers not to enforce the travel restrictions.
Meanwhile, the dollar sank back toward and eight-week low against a basket of major currencies after Peter Navarro, Trump’s top trade adviser, accused Germany of currency exploitation. he U.S. dollar index fell 0.82% to 99.60. It recovered slightly in Asian trade.
Traders were now looking ahead to the Federal Reserve's two-day meeting on monetary policy starting on Tuesday for further clues on the timing of the next U.S. interest rate hike. CB consumer confidence fell more than expected in January to 111.8, lower than the expected 113.0.
The Fed indicated last month that at least three rate increases were in the offing for 2017. However, traders remained unconvinced. Instead, markets are pricing in just two rate hikes during the course of this year, according to Investing.com’s Fed Rate Monitor Tool.