Gold prices gained in Asia on Friday as positive reports come from the manufacturing in China aided sentiment regionally that world’s second largest economy remained on track.
The Caixin Manufacturing PMI was up by 51.6 for its August futures performing better than expected, which was at 50.9 levels on Friday, which is the fastest pace of new orders in three years.
These figures follow the official manufacturing Purchasing Managers’ Index from China in Thursday’s sessions was reported to have reached 51.7 for the month of August. Gold prices were found higher in the session as the dollar weakened, after a reported subdued inflation data curbed investor expectations of a rate hike later this year while it renewed geopolitical tensions lifted sentiment on the precious metal.
Gold resumed its climb higher, following a two-day consolidation, as data showed consumer spending fell short of expectations while inflation increased at its slowest pace in nearly two years, which curbed investor expectation that the Federal will hike its benchmark rate later this year.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased by o.3%, the Commerce Department, said on Thursday.
Gold Futures for December delivery on the Comes division of the New York Mercantile Exchange was up by 0.17 percent and was found trading at $1,324.40 per troy ounce.
Gold prices are prone to price changes especially when it comes to the dollar. A lower dollar makes gold cheaper for holders of foreign currency while a fall in U.S. rates, reduce the opportunity cost of holding non-yielding assets like bullion.