November 1, 2019 / 11:40 AM / 10 days ago

PRECIOUS-Gold eases as China factory data whets risk appetite

* U.S. October non-farm payrolls data due at 1230 GMT

* Gold set for weekly gain

* Palladium eyes fourth consecutive weekly rise (Adds comment, details, updates prices)

By Karthika Suresh Namboothiri

Nov 1 (Reuters) - Gold prices slipped on Friday as strong data from China buoyed risk appetite, while investors awaited employment data from the United States to determine the impact of a long-drawn trade war on its economy.

Spot gold dipped 0.2% to $1,510.25 per ounce as of 1103 GMT. Prices were set to record a weekly gain of 0.4%.

U.S. gold futures fell 0.1% to $1,512.60 per ounce.

“The data out of China is somewhat easing concerns over the global landscape and ultimately reducing appetite for gold,” said FXTM analyst Lukman Otunuga, adding trade uncertainties and the interest rate cut by the U.S. Federal Reserve will, however, continue supporting gold in the medium to longer term.

European shares rose, on track for their best day in more than a week, as a surprise bounce in China’s manufacturing activity calmed investors worried about the progress in U.S.-China trade talks due to conflicting tones.

China’s factory activity unexpectedly expanded at the fastest pace in well over two years in October as new export orders rose and plants ramped up production, a private business survey showed.

Also lifting sentiment was a statement by U.S. President Donald Trump saying the two sides would soon announce a new venue for the signing of a “Phase One” trade deal, after protests in Chile had seen a planned summit there this month cancelled.

“While still above $1,500, it’s hard to build a case for a sustained bullish recovery currently as the metal remains sensitive to headlines,” MKS PAMP said in a note.

“Resistance levels sit toward $1,520-$1,525, with extension toward hard resistance at $1,535.”

Markets now await U.S. non-farm payrolls. The U.S. economy is forecast to have created 89,000 new jobs in October, slower than 136,000 new jobs created in the previous month, according to a Reuters poll.

Disappointing jobs data today could renew speculation over the Fed moving forward with a fourth rate cut by the end of 2019, FXTM’s Otunuga said.

The Fed cut interest rates for a third time this year, but signalled there would be no further reductions unless the economy takes a turn for the worse.

Other precious metals remained muted, while silver fell 0.3% to $18.07 and platinum was flat at $931.94.

Palladium edged 0.3% lower to $1,789.60. The metal was set to mark a four-week gaining streak, having notched up a record high of $1,824.50 an ounce on Wednesday. (Reporting by Eileen Soreng and Karthika Suresh Namboothiri in Bengaluru; Editing by Emelia Sithole-Matarise)

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