Investing.com - Gold prices swung between small gains and losses on Wednesday, as investors monitored volatile movements in global equity markets.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange shed 60 cents, or 0.05%, to trade at $1,137.70 a troy ounce during European morning hours.
A day earlier, gold tumbled $15.30, or 1.33%, to end at $1,138.30, after China's central bank cut interest rates in a bid to boost economic growth and halt a stock market rout.
The People's Bank of China cut interest rates by 25 basis points to 4.6% on Tuesday, in a much-anticipated move that some in the market believed was long overdue. The central bank also cut the reserve requirement ratio for large lenders by 0.5% to 18.0%.
However, Chinese equities struggled on Wednesday, as worries about whether China’s central bank had done enough to spur its slowing economy remained on investors' minds.
After a rollercoaster session swinging in and out of the red, the Shanghai Composite closed down 1.3%, reflecting investors' views that much more support was needed from the government and the central bank.
Chinese equities have lost nearly 30% over the past two weeks amid growing fears over China's slowing economy.
Recent steep declines in Chinese equity markets have sparked fears that they will hasten an economic downturn and undermined investor confidence in the government’s ability to revitalize economic growth.
The turmoil in markets began when China unexpectedly devalued the yuan on August 11, sparking fears over the condition of the economy.
In Europe, Germany's DAX dropped almost 2% on Wednesday, while France’s CAC 40 and London's FTSE 100 were both down around 1.5%, as investors resumed their focus on the deteriorating outlook for China and its impact on the global economy.
Meanwhile, U.S. stock futures gained 1%, signaling that Wall Street will open stronger later in the day, as markets attempt to recover from sharp losses the previous session.
In a sign of how unconvinced investors were of China's latest easing move, a sharp rally on Wall Street evaporated on Tuesday and turned into deep losses.
China's slowing economy and global market turmoil have also created fresh uncertainty over whether the Federal Reserve will start hiking interest rates next month.
The timing of a Fed rate hike has been a constant source of debate in the markets in recent months.
Some traders believe the Fed could postpone raising interest rates until December as officials are likely to remain concerned over global growth and inflation pressures due to China’s shock currency devaluation move and weak commodity prices.
A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.
Elsewhere in metals trading, copper for September delivery on the Comex division of the New York Mercantile Exchange slumped 4.0 cents, or 1.71%, to trade at $2.274 a pound during morning hours in London.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.