Investing.com - Gold prices rebounded in Asia on Wednesday with China in focus as the HSBC April flash Performance of Manufacturing Index suggested China's manufacturing sector is on track to record a fifth straight month of contraction, though there was a slight increase from March.
The HSBC PMI rose to 48.3 in a preliminary assessment for April from the March final of 48,, leaving room for government steps on the economy, said HSBC chief China economist Qu Hongbin.
"Domestic demand showed mild improvement and deflationary pressures eased, but downside risks to growth are still evident as both new export orders and employment contracted. The State Council released new measures to support growth and employment after the release of Q1 GDP. Whilst initial impact will likely be limited, they signalled readiness to do more if necessary. We think more measures may be unveiled in the coming months and the PBOC will keep sufficient liquidity."
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at $1,284.80 a troy ounce up 0.29%, after hitting an overnight session low of $1,277.60 and off a high of $1,292.70.
In overnight trade, gold prices edged to two-month lows as a fresh batch of solid U.S. housing and regional factory barometers gave support for the greenback, which trades inversely with the yellow metal.
In the U.S. earlier, industry data revealed that existing home sales fell by 0.2% in March to 4.59 million units, and while soft, the figure did beat expectations for 4.55 million units.
A separate report showed that the Richmond Fed manufacturing index jumped to 7 this month, from a reading of -7 in March, beating expectations for a reading of 0.
A day earlier, the Conference Board reported that its index of leading indicators, which measures future economic activity, increased 0.8% in March after a 0.5% rise in February, beating expectations for a 0.7% reading.
Also on Monday, the Chicago Fed National Activity Index decreased to 0.20 in March from 0.53 in February, in line with expectations.
The numbers reminded investors that even though the timing of rate hikes in the U.S. remains unclear, the Federal Reserve remains on track to continue tapering its monthly bond-purchasing program this year as the economy recovers.
Fed bond purchases, currently standing at $55 billion a month, weaken the dollar by suppressing interest rates, making gold and attractive hedge while such policies remain in effect.
Elsewhere, physical gold funds continued to see outflows, which pressured prices lower as well.
Silver for May delivery was up 0.48% at US$19.453 a troy ounce, while copper futures for May delivery rose 0.03% at US$3.059 a pound.