Gold prices ease in Asia as dollar mostly steady, holiday demand eyed

Investing.com - Gold prices continued weakness into Asia on Wednesday as the dollar held mostly steady and holiday demand failed to lift the precious metal.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at $1,230.50 a troy ounce, down 0.18%, after hitting an overnight session low of $1,231.30 and off a high of $1,238.50.

Overnight, gold futures held steady but came off earlier highs after soft European data weakened the euro and sent investors snapping up greenback positions.

Soft European data gave the dollar a boost on Tuesday, though gold stayed in positive territory on demand from investors seeking safe-haven to digest turbulence in equities markets.

The ZEW Centre for Economic Research reported earlier that its German economic sentiment index fell to -3.6 this month from September’s 6.9 reading. Analysts had expected the index to come in at 1.0 in October.

The index of euro zone economic sentiment plunged to 4.1 in September from 14.2 in August, well below expectations for a decline to 7.1.

A separate report showed that eurozone industrial production contracted 1.8% in August from July, outpacing expectations for a 1.6% decline. July's figure was revised to a 0.9% rise from a previously estimated 1.0% increase.

Year-on-year, industrial production fell 1.9% in August, surpassing expectations for a 0.9% decline and after rising at a rate of 1.6% the previous month.

European Central Bank President Mario Draghi has said monetary authorities will do what it takes to steer the continent away from deflationary declines, and Tuesday's data sparked expectations that further stimulus measures may be needed to kick-start the economy.

Silver for December delivery was down 0.22% at $17.337 a troy ounce. Copper futures for December delivery fell 0.03% at $3.078 a pound.