* China PMI data show economy improving in October
* Spot gold may edge up to $1,736/oz – technicals
* Coming up: U.S. consumer confidence, Oct; 1400 GMT (Updates prices)
By Rujun Shen
SINGAPORE, Nov 1 (Reuters) – Gold traded flat on Thursday, shrugging off data showing China’s economy was perking up, as investors looking for more clarity on the global economy focused instead on U.S. employment data due on Friday.
Gold had climbed to near $1,800 an ounce in early October after aggressive stimulus measures announced by central banks including the U.S. Federal Reserve and European Central Bank fuelled a rally.
But the momentum has fizzled, and gold has been stuck in a narrow range in recent days as investors stayed put ahead of the release of the U.S. nonfarm payrolls data on Friday, and the presidential election next week.
Gold barely moved after data was released showing that China’s economy is finally regaining traction, although the recovery remains sluggish.
“The reason for gold to rise is uncertainty. If PMI numbers rise, that adds to confidence in the market, which is probably negative to gold,” said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong.
But he added that an improving Chinese economy would encourage more gold buying, which would help boost demand for the precious metal and support prices.
In addition, the global economic outlook remains uncertain as the euro zone debt crisis drags on and the U.S. economy has yet to show signs of a substantial recovery.
“There is still enough uncertainty out there, and central banks will still have to do some heavy-lifting, and it should be supportive of gold,” Friesen said.
Spot gold was nearly flat at $1,721.41 an ounce by 0656 GMT, after hitting a one-week high of $1,725.55 in the previous session.
U.S. gold inched up 0.2 percent to $1,722.10.
Technical analysis suggested that spot gold may rebound marginally to $1,736 an ounce, as indicated by a falling channel and a Fibonacci retracement analysis, said Reuters market analyst Wang Tao.
PHYSICAL MARKET ACTIVITY SUBDUED
The anaemic performance has also led to sluggish activity in the physical market in Asia.
“There is some preparation for Christmas going on, but overall not much is happening as prices are stuck in a range,” said a Singapore-based dealer.
In Singapore, gold bar premiums stood at 80 cents an ounce above London prices, she added.
Investors are also waiting for U.S. auto sales data due later in the day. Sales are set to rise 11 percent in October, led by Toyota Motor Corp and Honda Motor Co which benefited from increased demand for compact cars as gasoline prices remained high across the country.
An improved auto market will help underpin sentiment in platinum group metals that are widely used to produce catalysts to clean vehicle exhaust.
Spot palladium rose 1.2 percent to $607.47, moving close to a one-week high of $609.5 hit in the previous session.
Spot platinum gained half a percent to $1,569.49.
Source: Reuters
