Investing.com - Gold prices fell on Tuesday after markets digested U.S. factory data and determined the numbers were positive and depicted an economy that continues to mend and in need of less Federal Reserve stimulus for support.
On the Comex division of the New York Mercantile Exchange, gold for June delivery was down 0.31% at $1,279.80, off a session high of $1,288.40 and up from a low of $1,278.30
The June contract settled down 0.81% at $1,283.80 on Monday.
Gold futures were likely to find support at $1,265.00 a troy ounce, the low from Feb. 10, and resistance at $1,299.10, Monday's high.
The Institute for Supply Management reported earlier that its manufacturing purchasing managers' index rose to 53.7 in March from 53.2 in February, missing market expectations for a 54.0 reading.
The report showed that employment growth slowed, with the employment index falling to 51.1 from 52.3, the lowest level since June 2013.
The numbers weakened the dollar earlier, as investors avoided the greenback ahead of Friday's March jobs report, which many feel may depict and improving albeit sluggish U.S. economy, one still in need of Federal Reserve stimulus support.
The Fed is currently purchasing $55 billion in bonds a month to spur recovery, a monetary policy tool known as quantitative easing that suppresses interest rates to prop up the economy, weakening the dollar as a side effect, thus bolstering gold's appeal as a hedge.
Upon digesting the data, however, investors viewed the PMI numbers as positive, as March marked the second month of gains for the indicator, which weakened gold by keeping expectations firm that stimulus programs that have supported gold for years are on their way out.
Elsewhere on the Comex, silver for May delivery inched down 0.28% and trading $19.697 a troy ounce, while copper for May delivery was up 0.26% and trading at $3.034 a pound.