Gold was steady on Wednesday after ending January with its biggest monthly rise since August, while investors eyed more data from the world's key economies for trading cues after China released a better-than-expected manufacturing survey number.
China's official Purchasing Managers' Index showed the manufacturing sector expanded modestly in January, with the index reading inching up to 50.5 from 50.3 in December, above a 49.5 reading forecast.
"The short-term trend (for commodities) is still favourable, 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 .
Spot gold was little changed at $1,738.10 an ounce by 0319 GMT, off a nearly two-month high of $1,747.39 hit in the previous session. U.S. gold traded flat at $1,738.30.
Hope for further monetary easing from the United States and the euro zone run high and will likely support gold, especially after the U.S. Federal Reserve Chairman Ben Bernanke hinted at the possibility of more asset buying last week.
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," Tse said.
Data due later in the day include the euro zone manufacturing survey and the Institute for Supply Management index from the United States. The 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.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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