Investing.com - Gold held lower in Asia after solid China trade data for December showed a surprise gain in exports.
On the Comex division of the New York Mercantile Exchange, gold for February delivery was down 0.07% to $1,084.40 a troy ounce.
Silver futures for March delivery rose 0.39% to $13.805 a troy ounce, while copper futures jumped 0.70% to $1.971 a pound.
China reported December exports rose 1.4%, far outpacing an expected 8.0% drop and the first gain in six months, while imports fell 7.6%, less than the 11.5% drop seen.
The trade balance came in at $60.09 billion, wider than the expected $53 billion surplus.
As well, China's exports rose in December for the first gain in six months, initial figures in yuan terms showed Wednesday. Data from the General Administration of Customs showed a gain of 2.3% for exports in December compared with a year earlier in yuan terms. Imports fell 4.0% in December in yuan terms.
In 2015, exports fell 1.8% and imports declined 13.2% with a trade surplus of RMB3.69 trillion expanding 56.7% from 2014.
As well, the yuan's central parity rate against the U.S. dollar was set at 6.5630 Wednesday, slightly weaker than Tuesday's 6.5628, the People's Bank of China said.
Overnight, gold futures fell considerably on Tuesday amid a slightly higher dollar, as equity markets in China stabilized and the timing of the Federal Reserve's next interest rate hike remained in focus. The Shanghai Composite opened higher and traded up 0.57% after the data.
In overnight trading, the Shanghai Composite index briefly fell under the 3,000 level before rallying late to close at 3,022.86, up 0.2% on the session. It came amid repeated efforts from the People's Bank of China (PBOC) to intervene in the offshore yuan market, Bloomberg reported. As a result, the offshore yuan in Hong Kong traded at 6.5850 against the dollar, while the Renminbi in Shanghai traded at 6.5767, creating a 0.2% spread between the mainland and offshore currencies.
By comparison, the spread reached a record high of 2.9% last week as the PBOC devalued the mainland yuan sharply in an effort to bolster exports. While the PBOC strictly limits yuan trading in mainland China, there is more flexibility for currency traders in Hong Kong, where it can be bought and sold more freely.
Although the PBOC has considered letting the mainland yuan slide to the offshore level in recent months, the move has serious political and economic ramifications. Sharp devaluations in the yuan can increase capital outflows by investors away from China, creating further damage to the economy.
Chinese equities have tumbled more than 10% since the start of the new year, amid escalating fears of the slowest growth in the world's second-largest economy in nearly a quarter-century. Last week's rout in Chinese stocks prompted investors to depart from their positions and pile into gold, a preferred safe-haven asset.
Elsewhere, International Monetary Fund managing director Christine Lagarde said at a Banque de France symposium in Paris that the Federal Reserve risks damaging a host of Emerging Market economies if it fails to raise interest rates gradually over the next year. As the Fed embarks on its first tightening cycle in a decade, Lagarde emphasized that any rate hikes should be accompanied by "clear evidence" of higher inflation in the U.S. Long-term inflation has remained under the Fed's targeted goal for every month over the last three years.
Earlier at the conference, Fed vice chair Stanley Fischer discussed the impact of a lower long-run equilibrium real interest rate on the Fed's plans to normalize monetary policy.
The Fed defines the rate as the level that is consistent with full employment and stable inflation of 2%. The equilibrium real interest rate is also viewed as the ideal rate that would persist once all shocks in the economy die down, Fischer added.
"At present, it looks likely that (the equilibrium rate) will remain low for the policy-relevant future, but there have in the past been both long swings and short-term changes in what can be thought of as equilibrium real rates," Fischer said.
Last week, Fischer indicated in an interview with CNBC that the Fed could raise interest rates as much as four times in 2016. Any rate hikes are viewed as bearish for gold, which struggles to compete with high-yield bearing assets in a rising rate environment.