Gold prices weaker in early Asia with HSBC flash PMI survey due

Investing.com - Gold prices traded weaker in early Asia on Thursday following the Federal Reserve minutes overnight with investors awaiting an initial PMI survey from China for cues on copper demand.

In focus in Asian data is the HSBC China November flash manufacturing PMI at 0945 local time (0145 GMT). Investors will be watching for signs of further improvement in the
headline after October's final rose to a three-month high of 50.4.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at $1,181.60 a troy ounce, down 0.13%, after hitting an overnight session low of $1,174.90 and off a high of $1,201.70.

Overnight, gold prices fell in U.S. trading on Wednesday as investors bet the Federal Reserve remains on track to raise interest rates some time in 2015, as only the timing of a move to tighten policy is still up in the air.

Monetary authorities largely agree that the economy was improving and no longer needed stimulus tools such as asset purchases, though concerns persisted that inflation expectations may be dipping, the minutes of the Federal Reserve's October policy meeting released Wednesday revealed.

At its October monetary policy meeting, the Fed left its benchmark interest rate unchanged at 0.00-0.25% and said it was closing its monthly bond-buying program in a move widely expected by markets.

While the economy is improving, some monetary authorities want to be sure recovery remains sustained before raising interest rates, which is seen taking place in 2015, with a few voting members expressing concerns that inflationary pressures remain soft.

"Participants anticipated that inflation would be held down over the near term by the decline in energy prices and other factors, but would move toward the Committee's 2 percent goal in coming years, although a few expressed concern that inflation might persist below the Committee's objective for quite some time," the minutes read.

"Most viewed the risks to the outlook for economic activity and the labor market as nearly balanced. However, a number of participants noted that economic growth over the medium term might be slower than they currently expected if the foreign economic or financial situation deteriorated significantly."

Still, gold shrugged off the report on sentiments that benchmark U.S. borrowing costs are headed higher regardless in 2015.

U.S. housing data came in strong enough to water down prices as well.

The U.S. Commerce Department reported earlier that the number of building permits issued last month increased by 4.8% to 1.080 million units from September's revised total of 1.031 million.

Analysts expected building permits to rise by 0.9% to 1.040 million units in October, which suppressed gold prices by stoking expectations that tighter monetary policy is on the way in roughly a year or possibly sooner.

The report also showed that U.S. housing starts fell by 2.8% last month to hit 1.009 million units from September’s total of 1.038 million units, compared to expectations for a drop to 1.025 million.

Silver futures for December delivery was down 0.14% at $16.112 a troy ounce. Copper futures for December delivery were down 0.05% at $3.031 a pound.