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New York - Gold fell to a seven-week low on Tuesday after firm US manufacturing data lifted US equities, but strong physical demand from Asia was expected to underpin prices.
Bullion came under pressure after data showed US factory activity rose in March, with production posting its biggest increase since the recession ended in the latest indication the economy was regaining its footing after a brutal winter.
Receding geopolitical tensions and fears the Federal Reserve will raise interest rates next year are also weighing on gold, analysts said.
"Given gold's recent drop below $1 300 an ounce, we have noticed a slight increase in physical demand from Asia. Further weakness to gold prices may elicit stronger buying from the emerging markets and help cushion further losses," said James Steel, chief precious metals analyst at HSBC.
Bullion came under pressure after data showed US factory activity rose in March, with production posting its biggest increase since the recession ended in the latest indication the economy was regaining its footing after a brutal winter.
Receding geopolitical tensions and fears the Federal Reserve will raise interest rates next year are also weighing on gold, analysts said.
"Given gold's recent drop below $1 300 an ounce, we have noticed a slight increase in physical demand from Asia. Further weakness to gold prices may elicit stronger buying from the emerging markets and help cushion further losses," said James Steel, chief precious metals analyst at HSBC.
