Gold prices held steady during Asian trading hours on Wednesday after plunging more than one percent in the preceding session as better manufacturing PMI data from China lifted some confidence level, laid low by dismal quarterly earnings results from across the world; nevertheless, gains are likely to be capped with investors keeping close eye on Federal Reserve’s policy statement even as uncertainty surrounding the global macroeconomic environment and U.S. Presidential elections might keep them in sidelines. Silver prices, meanwhile, edged higher in early trading on Wednesday.
Earlier today, gold prices gained a bit, touching $1,714 an ounce mark after HSBC preliminary data on manufacturing activities in China for October showed marked improvement. The PMI index rose to 49.1, a most robust data since April, probably signaling that China’s economy has bottomed out. Nevertheless, the yellow metal pared initial gains and hovered around $1710 level, not far from its seven month low of $1,703 an ounce level, hit in the previous session.
Commenting over the current trend in the bullion market, Ronald Leung, Director of Lee Cheong Gold Dealers in Hong Kong said to Reuters, “Investors are buying a little bit. They are not that aggressive, Of course, towards $1,700 you can see some support over there. I think the most important thing is the U.S. election.”
Bullion investors will also keep an eye on the Federal Reserve’s policy statement, scheduled to be released on Wednesday. However, most economists do not anticipate that the central bank will provide more quantitative easing.
At around 6:30 a.m. EST, U.S. gold futures for December delivery inched up 0.03% to $1,709.90 an ounce.
Meanwhile in the physical market side, dealers are expecting an uptick in demand from one of the world’s biggest consumer, India as festivals such as Diwali and Dhanterasa, which are considered as an auspicious occasion to buy gold are just around the corner.
Speaking to Reuters, one Singapore based gold dealer said that demand will pick up as Indian Jewelers will rush to buy ahead of Diwali.
Silver futures edged up 0.43% to $ 31.93 an ounce.
