GoldLittle Changed Ahead of Fed Meeting
Gold hovered near $US1640 an ounce on Monday after data showed stabilizing factory activities in China, while investors focused on a US Federal Reserve policy meeting later in the week to gauge the health of the world's largest economy.
Gold fell 1 per cent last week, in tandem with equities and other commodities, as resurfaced fear about Spain's debt crisis raised concerns about global economic growth and dented risk appetite.
China's factories stabilised in April as output ticked higher, new business rose from multi-month lows and export orders perked up, the HSBC Flash Purchasing Managers Index said, in line with expectations.
"Gold doesn't seem to be trading on anything other than externally derived sentiment," said Nick Trevethan, senior commodity strategist at ANZ in Singapore.
"There is still pressure for gold prices. The market has been trying to push the support level at $US1630-$US1640, although the push is rather half-hearted right now."
The Fed's attitude towards monetary easing has been a key factor behind the fluctuation of gold prices in recent months. If the Fed drops any hint on more monetary easing at the meeting Tuesday and Wednesday, gold prices will jump quickly.
Spot gold was little changed at $US1642.04 an ounce. Prices have moved in a range of $US3 in early Asian hours. US gold traded nearly flat at $US1643.20.
Investors remain concerned about Europe's fiscal health. Spanish and Italian bond yields were still near dangerously high levels, while the prospect of a Socialist candidate winning the French presidential election added to worries whether the powerful Franco-German ally that has helped set tones in the region's battle against its debt problems will remain intact.
Over the weekend the International Monetary Fund managed to more than double its lending power in a bid to protect the world economy from the euro zone debt crisis, which is now in its third year.
Gold has moved in a range between $US1630 and $US1660 since the beginning of last week, and trading volumes were light in absence of conviction from investors.