Investing.com - Gold prices fluctuated between small gains and losses during Asian trading hours on Wednesday with strong economic data from China, which has become the world’s largest consumer of precious metal.
On Tuesday, Chinese Ministry of Commerce reported that Foreign Direct Investment in the country went up 16.1% to $10.76 billion in January on the year.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,322.20 a troy ounce during Asian trading, up 0.02%.
On Tuesday, the gold prices hit a session low of USD1,321.40 and off a high of 1,323.00 to settle at
Futures were likely to find support at USD1,265.00 a troy ounce, the low from Feb. 10, and resistance at USD1,32561.70, the high from Oct. 28.
On Tuesday, the U.S. dollar weakened and gave gold room to rise after the Federal Reserve Bank of New York said that its general business conditions index came in at 4.48 for February, down from a 20-month high of 12.51 in January. Analysts had expected the index to decline to 9.00.
The new orders index fell to zero from a two-year high of 11 last month.
The numbers were the latest in a series of soft U.S. economic indicators that have prompted many investors to wonder whether the Federal Reserve will slow the pace of reductions to its asset-buying stimulus program.
The Fed is currently buying USD65 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.
Profit taking capped gains somewhat after the World Gold Council said earlier that global gold demand fell 15% in 2013, as outflows from physically backed exchange traded funds outweighed record consumer demand.
Demand for gold jewelry was up 17%, the World Gold Council said, and demand for gold bars and coins rose 28%.
The council also said China overtook India as the world’s largest market for gold. Chinese demand was up 4% in the final three months of 2013, while Indian consumers bought 16% less gold.
Meanwhile, silver for March delivery fell 0.30% and trading at USD21.880 a troy ounce, while copper futures for March delivery were down 0.01% at USD3.285 a pound.
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