Investing.com - Gold and copper gained in Asia on Wednesday as consumer prices in China nudged a bit higher than expected, bolstering demand hopes.
In China, CPI rose 1.5% year-on-year, a tick higher than the 1.4% seen and PPI fell 5.9%, matching expectations.
The higher consumer inflation will no doubt limit the room for the People's Bank of China to further cut interest rates. The PBOC last cut the benchmark one-year deposit rate to 1.5% at the end of October.
China is the world's largest producer of gold and the world's second-largest consumer of the precious metal behind India. It is also the world's top copepr importer.
On the Comex division of the New York Mercantile Exchange, gold for February delivery rose 0.14% to $1,076.80 a troy ounce.
Silver futures for March delivery gained 0.17% to $14.140 a troy ounce, while copper futures rose 0.46% to $2.067 a pound.
In Australia, the Westpac consumer sentiment dipped 0.8% for December, down from 3.9% in the previous month. Also in Australia home loans for October fell 0.5%, less than expected and housing finance slumped 6.1% for the same month.
Earlier in Japan, core machinery orders for October year-on-year jumped 10.3%, far outpacing the gain of 1.4% seen with the month-on-month pace up 10.7%, well above the expected 1.5% drop.
Japan's Cabinet Office has forecast that core orders will rise 2.9% on quarter in October-December after slumping 10.0% in the third quarter and rising 2.9% in the second quarter. The increase is expected be led by electronic communications equipment, industrial machinery and rail cars.
Overnight, gold futures were relatively flat on Tuesday lingering near six-year lows, as investors remained focused on next week's critical Federal Reserve meeting where the U.S. central bank is expected to raise short-term interest rates for the first time in nearly a decade.
Gold likely gained support at $1,046.20, the low from December 3 and was met with resistance at $1,110.70, the high from Dec. 5. Metal traders will likely partake in cautious trading over the next week until the Federal Open Market Committee issues a highly-anticipated monetary policy statement following its two day meeting on Dec. 15-16.
A host of influential policymakers, including Fed chair Janet Yellen have sent strong indications that it will abandon its current zero-interest rate policy for the first time in almost seven years at next week's meeting.
The Federal Funds Rate, the FOMC's benchmark rate, has remained between zero and 0.25% at every Fed meeting dating back to December, 2008, months after the outbreak of the Financial Crisis. The FOMC has also not approved a rate hike for more than nine years since its met in June, 2006. Any rate hike from the FOMC is expected to be modest, likely just 0.25%, before the Fed engages in a gradual tightening cycle over the next several years.
While Yellen has been pleased with the moderate growth exhibited by the U.S. economy this year, she continues to bemoan the slow pace of inflation that remains considerably below the Fed's long-term targeted goal of 2%. Yellen, along with several colleagues, believe that the transitory factory dragging down inflation will recede once the dollar stabilizes and the price of crude oil recovers.