Gold prices dip in Asia on profit taking, investors eye dollar

Investing.com - Gold prices fell in Asia on Wednesday on profit taking after solid overnight gains on a mix of a weaker dollar and geopolitical tension.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at $1,222.90 a troy ounce, down 0.16%, after hitting an overnight session low of $1,214.70 and off a high of $1,235.60.

Overnight, gold futures rose as investors sold the dollar for profits, while U.S.-led air strikes in Syria fueled safe-haven demand for the precious metal.

Profit taking sent the dollar edging lower on Monday, wiping out a rally stemming from expectations for U.S. monetary policy to grow less accommodative at a time when European and Japanese monetary authorities take steps to loosen.

Markit Economics reported earlier that its preliminary U.S. manufacturing purchasing managers’ index came in at 57.9 in September, unchanged from August and the highest since April 2010 though shy of market calls for a 58.0 reading, which allowed the dollar to take a break from its rally.

A separate report showed that the Federal Reserve Bank of Richmond’s monthly manufacturing index rose to 14 this month from 12 in August, defying market forecasts for a decline to 10, which cushioned the dollar and capped gold's gains.

Events in the Middle East fueled gold's appeal as a safe haven to geopolitical tensions.

U.S.-led airstrikes in Syria involving five Arab nations targeting ISIS positions gave the yellow metal a boost in afternoon trading.

Gains were somewhat limited on perceptions that the days of ultra-loose U.S. monetary policies that have supported gold since the 2008 financial crisis are coming to an end.

In October, the Federal Reserve is expected to close its monthly bond-buying program and then begin raising benchmark interest rates some time in 2015.

Silver for December delivery was down 0.29% at $17.743 a troy ounce. Copper futures for December delivery were down 0.09% at $3.032 a pound.