Investing.com - Gold prices eased in Asia on Wednesday as investors eyed a key China maufacturing survey that came in weaker than expected and signaled possible weak demand for the precious metal.
The Caixin Manufacturing index for September fell to 47, from the August level of 47.3, putting it at a 78-month low.
On the Comex division of the New York Mercantile Exchange, gold for December delivery traded at $1.123.50, down 0.12%.
Silver for December delivery lost 0.24% to $14.720 a troy ounce.
Copper for December delivery dropped 0.39% to $2.295 a pound.
China, the world's largest consumer of copper, accounts for approximately 40% of all copper consumption in the world.
Overnight, gold futures fell considerably amid a stronger dollar, as weak Chinese demand and hawkish signals of an imminent interest rate hike by the Federal Reserve continued to place downward pressure on the precious metal.
A host of Fed governors continue to reiterate that a 2015 rate hike is on the table in the wake of last week's closely-watched decision to leave its benchmark Federal Funds Rate at its current level between zero and 0.25%. The U.S. central bank has left the rate at record lows since December, 2008 in an effort to stimulate a dormant economy reeling from the Financial Crisis. Nearly a decade has passed since the FOMC last tightened its monetary policy by instituting a rate hike.
Over the weekend, though, San Francisco Fed president John Williams acknowledged that the Fed's decision on whether to normalize policy was a "tough one," while providing indications that its next step could be to raise rates gradually if inflation moves upward in the coming weeks. At the FOMC's September policy meeting, 13 of its 17 members predicted that the committee will raise short-term rate by at least 0.25% at some point this year.
Then, on Monday, Atlanta Fed president Dennis Lockhart told reporters that he saw "few significant risks," in waiting to raise rates, while adding that a rate hike before New Year's is still possible. It came hours after St. Louis Fed president James Bullard strongly opposed a dovish stance toward a delayed hike, telling CNBC that he would have dissented from last week's decision if he had a vote.
Gold, which is not attached to dividends or interest rates, struggles to compete with high-yield bearing assets in periods of rising rates.
Investors remain concerned that persistent weakness in the Chinese economy could continue to spillover onto markets outside Asia. On Wednesday, analysts expect the Caixin Manufacturing PMI flash index to tick up to 47.5 in September, up slightly from a reading of 47.3 in August. The initial reading for the month came in at six-and-a-half year lows at 47.1, highlighting sustained weakness in the nation's factory production. Any reading below 50 provides forthcoming signs of contraction.