Investing.com - Gold prices fell during Asian trading hours on Friday as the markets expect reduced demand from major importer China after it reported weak manufacturing data.
On Thursday HSBC reported that Chinese preliminary manufacturing purchasing managers index fell to 48.3 in February against an expectation of 49.4 and compared to 49.5 in January. A value below 50 indicates that the manufacturing economy is in contraction.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery fell 0.15% at $1,320.70 a troy ounce during Asian trading.
On Thursday the April contract was up from a session low of $1,321.30 and off a high of $1,324.50 to settle at $1,322.70 on Wednesday.
Futures were likely to find support at $1,265.00 a troy ounce, the low from Feb. 10, and resistance at $1,332.20, Monday' high.
Gold prices have risen in recent weeks due to soft jobs, manufacturing and other economic indicators that prompted many investors to speculate that the Federal Reserve may slow the pace at which it tapers its asset-buying stimulus program.
The Fed is currently buying $65 billion in bonds a month to suppress interest rates to spur recovery, which weakens the dollar as a side effect, thus bolstering gold's image as a hedge.
On Wednesday, the Federal Reserve released the minutes of its January policy meeting that revealed most monetary authorities felt monthly bond purchases will continue tapering as the year unfolds, which boosted the dollar on Thursday.
Data out of the U.S. failed to seriously cap the greenback's advance, as speculation remained strong that the Federal Reserve will continue dismantling its dollar-weakening stimulus tools.
The Federal Reserve Bank of Philadelphia said that its manufacturing index deteriorated to minus 6.3 in February from January’s reading of 9.4. Analysts had expected the index to inch down to 8.0 in February, though investors viewed the numbers as a hiccup in recovery and likely the product or rough winter weather after digesting the report.
Also in the trading session, the Department of Labor said the number of individuals filing for unemployment assistance in the U.S. last week fell by 3,000 to 336,000, slightly below expectations for a decline of 4,000.
In a separate report, the Labor Department said U.S. consumer prices rose 1.6% on a year-over-year basis in January, in line with forecasts. Consumer prices were 0.1% higher from a month earlier, also matching forecasts.
Core consumer prices, which are stripped of volatile food and energy components, were also up 1.6% on a year-over-year basis and 0.1% from the previous month.
Meanwhile, silver for March delivery was down 0.15% and trading at US$21.683 a troy ounce, while copper futures for March delivery fell 0.15% at US$3.283 a pound.