Investing.com - Gold prices edged higher on Wednesday, easing back from the ten-week lows struck in the previous session, but gains looked likely to remain limited as weakening Chinese demand for the precious metal and signs that the U.S. economy is improving weighed.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were up 0.23% to $1,283.80. On Tuesday, gold fell to lows of $1,277.60, the weakest since February 11.
Gold prices edged higher as concerns over ongoing unrest in eastern Ukraine supported safe haven demand.
Gold, seen as a safe haven investment, usually benefits from economic and geopolitical turmoil.
But signs of a sustained economic recovery in the U.S. overshadowed the crisis in Ukraine, after data on Tuesday showed that U.S. new home sales fell less than expected in March, while manufacturing activity in the Richmond region rose this month.
The data reinforced the view that the Federal Reserve will wind up its stimulus program before then end of the year. The stimulus program pushed down the value of the dollar, increasing the attraction of gold as an alternative investment.
Concerns over slackening demand from top buyer China also continued to weigh after the World Gold Council said last week that physical demand is likely to stagnate this year.
The weaker Chinese yuan also made it more expensive for buyers to buy gold. The yuan fell to 16-month lows against the dollar on Wednesday, as China’s central bank continued measures aimed at deterring speculators betting on a rising currency.
Elsewhere, in metals trading, silver for May delivery was up 0.38% to $19.435 a troy ounce, while copper for May delivery was down 0.33% to $3.043 a pound.