Investing.com - Gold prices dipped in Asian trading on Wednesday cooling a multi-session rally that sent the precious metal hitting five-month highs recently on expectations the Federal Reserve will roll out stimulus measures to jolt the economy, which would weaken gold's traditional hedge, the dollar.
Weak manufacturing data out of the U.S. earlier sent gold climbing before profit taking kicked in early in Asian trading.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery were down 0.10% and trading at USD1,691.85 a troy ounce, up from a session low of USD1,691.75 and down from a high of USD1,692.75 a troy ounce early during the session.
Gold futures were likely to test support at USD1,688.05 a troy ounce, Tuesday's low, and resistance at USD1,698.75, Tuesday's high.
In the U.S. earlier, the Institute for Supply Management said its purchasing managers' index fell by 0.2 points to 49.6 in August from a reading of 49.8 in July.
Analysts had expected the ISM index of purchasing managers to gain 0.2 points and hit 50.0.
The report added that new orders fell while inventories rose, indicating that sales are dropping, while the number of new workers hired fell to the lowest level since late 2009.
The numbers sent gold rising earlier as investors viewed the data as fodder for Federal Reserve intervention, though profit taking sent it cooling early in Asian trading, as the yellow metal has seen several sessions of gains recently.
Federal Reserve officials have said they cannot rule out a third round of quantitative easing to spur recovery if the economy fails to show sustained improvement.
Under quantitative easing, the Fed buys assets such as Treasury holdings or mortgage-backed securities from banks, pumping the financial system full of liquidity to push down interest rates and encourage investing and hiring.
Such accommodative policies tend to weaken the dollar by design and send gold climbing.
The dollar and told normally trade inversely from one another.
The U.S. Bureau of Labor Statistics will release its August jobs on Friday while the Fed is due to open a two-day monetary policy meeting on Sept. 11, which had markets on edge.
Elsewhere on the Comex, silver for December delivery was down 0.56% and trading at USD32.230 a troy ounce, while copper for December delivery was down 0.03% and trading at USD3.470 a pound.
Weak manufacturing data out of the U.S. earlier sent gold climbing before profit taking kicked in early in Asian trading.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery were down 0.10% and trading at USD1,691.85 a troy ounce, up from a session low of USD1,691.75 and down from a high of USD1,692.75 a troy ounce early during the session.
Gold futures were likely to test support at USD1,688.05 a troy ounce, Tuesday's low, and resistance at USD1,698.75, Tuesday's high.
In the U.S. earlier, the Institute for Supply Management said its purchasing managers' index fell by 0.2 points to 49.6 in August from a reading of 49.8 in July.
Analysts had expected the ISM index of purchasing managers to gain 0.2 points and hit 50.0.
The report added that new orders fell while inventories rose, indicating that sales are dropping, while the number of new workers hired fell to the lowest level since late 2009.
The numbers sent gold rising earlier as investors viewed the data as fodder for Federal Reserve intervention, though profit taking sent it cooling early in Asian trading, as the yellow metal has seen several sessions of gains recently.
Federal Reserve officials have said they cannot rule out a third round of quantitative easing to spur recovery if the economy fails to show sustained improvement.
Under quantitative easing, the Fed buys assets such as Treasury holdings or mortgage-backed securities from banks, pumping the financial system full of liquidity to push down interest rates and encourage investing and hiring.
Such accommodative policies tend to weaken the dollar by design and send gold climbing.
The dollar and told normally trade inversely from one another.
The U.S. Bureau of Labor Statistics will release its August jobs on Friday while the Fed is due to open a two-day monetary policy meeting on Sept. 11, which had markets on edge.
Elsewhere on the Comex, silver for December delivery was down 0.56% and trading at USD32.230 a troy ounce, while copper for December delivery was down 0.03% and trading at USD3.470 a pound.