Gold prices dip in Asia as focus on U.S. jobs data, Fed

 Gold prices eased in Asia on Wednesday with little regional data on the day and the focus sharpening on the Federal Reserve and end of the week U.S. jobs data.

Gold for December delivery on the Comex division of the New York Mercantile Exchange fell 0.28% to $1,136.60 a troy ounce.

Silver for December delivery was down 0.41% to $14,560 a troy ounce and copper for December delivery rose 0.07% to 2.294 a pound.

Overnight, gold futures rose moderately on Tuesday amid a weaker dollar, as further indications of a weakening economy in China and the timing of a possible interest rate hike from the Federal Reserve remained in focus.

In overnight trading, China's official manufacturing purchasing index (PMI) slumped to a three-year low in August, falling to 49.7 from a reading of 50 in July. Any reading below 50 typically provides an indication that the sector is on the verge of suffering a recession. Separately, Caixin's index of smaller factories in China plunged to a six-year low of 47.3 in August from 47.8 in July. The world's second largest economy is on pace for its slowest expansion in nearly a decade, amid sharp decreases in exports and structural shifts in its productivity, capital and workforce.

Also on Tuesday, Christine Lagarde, the head of the International Monetary Fund, expressed significant concern with the steep transition the Chinese economy faces in the coming months in her first public comments since the People's Bank of China rattled global equity markets last week. Speaking in Jakarta, Lagarde cautioned investors on the spillover effects that could be created from persisting weakness in China's economy.

"As the Chinese economy is adjusting to a new growth model, growth is slowing—but not sharply, and not unexpectedly. The transition to a more market-based economy and the unwinding of risks built up in recent years is complex and could well be somewhat bumpy," Lagarde said. "That said, the authorities have the policy tools and financial buffers to manage this transition. Other emerging economies, including Indonesia, need to be vigilant to handle potential spillovers from China’s slowdown and tightening of global financial conditions."

China is the world's largest producer of gold and the second-largest consumer behind India.

In the U.S. the PMI index for August fell to 53.0, below a level of 53.8 a month earlier. The reading fell within the consensus range of forecasts between 52.7 and 54.0. Still, manufacturing growth slowed to its lowest level since October, 2013, amid weakness in new orders and moderate gains in backlog orders.

Investors could be hesitant to make any significant trades ahead of the Federal Open Market Committee's two-day meeting beginning on Sept. 17. Last week, Fed vice chairman Stanley Fischer sent strong indications that the U.S. central bank could raise short-term interest at the meeting.