(Reuters) - Gold was steady on Wednesday after ending January with its biggest monthly rise since August, while investors cautiously awaited more data from the world's key economies for trading cues.
China's official Purchasing Managers' Index topped expectations and showed a modest expansion in January, but market sentiment remained fragile on concerns about global growth after surprisingly weak U.S. housing and consumer data on Tuesday.
Before the disappointing U.S. data, a string of upbeat numbers from the world's biggest economy had helped lift commodities and pushed gold up 11 percent in January.
"The short-term trend (for commodities) is still favorable, especially after encouraging data from China today," said Peter Tse, director at ScotiaMocatta in Hong Kong, but warned about increased volatility as a result of uncertainties over the euro zone debt crisis.
Greece and its international lenders, the European Union and the International Monetary Fund, have been in talks for weeks on a debt swap deal, which Athens needs urgently to avert a chaotic default next month.
Spot gold edged down 0.2 percent to $1,733.79 an ounce by 2:22 a.m. ET, off a nearly two-month high of $1,747.39 hit in the previous session. U.S. gold also lost 0.2 percent to $1,734.40.
Hope for further monetary easing from the United States and the euro zone runs high and will likely further boost gold, especially after U.S. Federal Reserve Chairman Ben Bernanke hinted at the possibility of more asset buying last week.
"Bernanke just gave the green light to buying gold," said a Singapore-based trader.
Physical buying interest remained muted after China returned from the Lunar New Year holiday earlier this week.
"There's no physical buying interest at this price level," said Tse of ScotiaMocatta.
Data due later in the day include a euro zone manufacturing survey and the Institute for Supply Management index from the United States. Euro zone flash inflation for January and U.S. January employment data from ADP are also expected.
The reports were likely to show many economies are seeing a sluggish start in 2012 amid slowing demand, putting central banks around the world under pressure to keep an accommodative policy to support growth.
