Investing.com - Gold gained in Asia on Tuesday in cautious trade as investors awaited fresh China data points for the global metals complex.
Comex gold futures rose 0.14%, to $1,269.91 a troy ounce. Copper futures on the Comex edged down 0.43% to $2.558 as investors trade cautious with China and Hong Kong markets shut and PMI data from the Mainland due on Wednesday expected to show a dip.
Tim Condon of ING Markets said the official manufacturing PMI for May is due tomorrow at 9:00 am local time with a consensus forecast of 51.0 (prior 51.2).
"Bottom line: Everything is correlated with production so we expect to see the pattern we observed in the industrial enterprise profits data – slowing growth in the mining, chemicals and building materials sectors and accelerating growth in the machinery and equipment sectors – echoed in the IP data. We also this means the peaks in the manufacturing PMI and in IP growth are behind."
Overnight, gold prices were little changed near a four-week high in North American hours on Monday, with holidays in the U.S., U.K. and China slowing trading activity around the world.
Trading volumes were likely to remain light with U.S. markets closed Monday for Memorial Day while the U.K. is also shuttered for a public holiday.
Market players are looking ahead to this week's U.S. employment report on Friday for further signs of the Federal Reserve's likely rate hike trajectory through the end of the year.
Besides the monthly jobs report, this week's holiday-shortened calendar also features U.S. data on manufacturing and service sector growth, consumer confidence, auto sales, personal spending, core PCE inflation, as well as monthly trade figures.
Futures traders are currently pricing in around an 80% chance of a hike at the Fed's June 13-14 meeting, according to Investing.com’s Fed Rate Monitor Tool.
However, market players are no longer convinced that the Fed will be able to raise rates two more times this year, with odds for a second hike by December currently at about 35%.
The median Fed policymaker forecast is for two more rate increases by year-end. But a recent run of disappointing U.S. economic data combined with signs of deepening political turmoil in the White House raised doubts over the Fed's ability to raise rates as much as it would like before the end of the year.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
Investors appear to have shrugged off any geopolitical worries stemming from yet another missile test carried out by North Korea on Monday. North Korea fired what appeared to be a short-range ballistic missile that landed in the sea off its east coast, South Korea's military said.
It was the ninth missile the hermit state has tested this year, as it faces increasing pressure from the U.S. and historical ally China over its missile testing program.