Forexpros - Gold futures traded at the highest level since late-March during European morning hours on Monday, as weak Chinese manufacturing data added to hopes policymakers in Beijing will introduce more stimulus measures. Mounting speculation the Federal Reserve was moving closer to stimulate growth in the U.S. economy further supported gains following a speech by Fed Chairman Ben Bernanke on Friday. On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,689.25 a troy ounce during European morning trade, adding 0.25%. Prices were stuck in a tight trading range of USD1,685.75 a troy ounce, the daily low and a session high of USD1,691.85 a troy ounce. Prices rallied to USD1,693.05 a troy ounce on Friday, the highest since March 27. Gold futures were likely to find support at USD1,634.55 a troy ounce, the low from August 22 and near-term resistance at USD1,699.55, the high from March 27. Gold prices extended a gain of more than 2% from Friday after disappointing Chinese manufacturing data released earlier added to hopes policymakers in Beijing will introduce fresh stimulus measures to boost growth in the world’s second largest economy. China’s HSBC Flash Purchasing Managers Index fell to a 41-month low of 47.6 in August from a preliminary reading of 47.8, as new orders slumped in the face of weakening global demand. The index stood at 49.3 in July. The data came after the China Federation of Logistics and Purchasing said over the weekend that its Purchasing Managers Index contracted for the first time in nine months in August, falling to 49.2 from 50.1 in July. The disappointing data added to ongoing speculation policymakers in Beijing will cut banks’ reserve requirements or benchmark interest rates again after inflation cooled to a 30-month low in July. The People’s Bank of China has lowered both twice so far this year in an effort to boost lending and stimulate growth. Expectations of monetary stimulus tend to benefit gold, as the yellow metal is seen as a safe store of value and inflation hedge. Market sentiment remained supported after Federal Reserve Chairman Ben Bernanke indicated that the U.S. central bank could implement fresh stimulus measures to strengthen the U.S. economic recovery. Speaking at the Fed’s annual symposium in Jackson Hole, Wyoming, on Friday, Bernanke said the persistently high rate of unemployment was a “grave concern� and reiterated that the central bank was ready to provide additional policy accommodation as needed to shore up growth. Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would pump more money into the financial system. Gold gained as much as 15% earlier this year to hit USD1,790 an ounce after the Fed said in January it would keep interest rates near zero until at least late 2014 and indicated that it could introduce a fresh round of asset-purchases. However, prices have lost almost 6% since late February, as the Fed failed to deliver more easing and amid concerns over the euro zone’s deepening debt crisis, which has fueled demand for the precious metal's hedge, the greenback. Markets were looking ahead to U.S. government data on non-farm payrolls on Friday, to see if the labor market has improved. Meanwhile, expectations that the European Central Bank is working on measures to help stabilize the euro zone's sovereign debt markets ahead of its upcoming meeting on Thursday. Elsewhere on the Comex, silver for December delivery climbed 1.35% to trade at USD31.86 a troy ounce, while copper for December delivery rose 0.7% to trade at USD3.481 a pound.

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