Gold soared on Tuesday as the release of downbeat Chinese business activity data boosted haven demand on the metal, yet gains were limited due to the rise in equities.
The precious metal hit a high of $1248.37 an ounce, while currently trading around $1240.30 from the opening at $1238.22.
Government data showed that China’s manufacturing sector remained in contraction for a seventh consecutive month in February, while the services sector grew at the slowest pace since late 2008.
Private data for the manufacturing sector released by Caixin/Markit came in at 48.0 last month, lower than both prior and expected readings of 48.4.
However, the sentiment witnessed improvement today after the PBoC said it cut its reserve requirement ratio, while it guided the yuan higher against the U.S. dollar.
The Shanghai Composite Index led the gains in Asia as it edged up 1.68 percent, capping gains in the yellow metal.
Gold took a boost on Monday from the release of downbeat U.S. data showing pending holes sales plunged to the lowest in a year and Chicago PMI showed an unexpected contraction in February.
The dollar’s rally for a third straight session to 98.35 against a basket of major currencies did not prevent the metal from advancing.
Later in the day, U.S. ISM manufacturing PMI may post a narrowing contraction of 48.5 in February from 48.2 in January.
