Gold rose on Tuesday as equities faltered on fresh signs of weakness in China's economy although mounting expectations that the US Federal Reserve will likely go ahead with an interest rate increase this month kept gains in check. Activity in China's factory sector shrank at its fastest rate in at least three years in August as domestic and export orders tumbled, increasing investors' fears that the world's second-largest economy may be lurching toward a hard landing.
"We are seeing some general risk-off moves in the Asian timezone and some buying of gold would be consistent with that," said Ric Spooner, chief market analyst at CMC Markets in Sydney. Spot gold was up 0.6 percent at $1,141 an ounce by 0558 GMT, after an uneventful session on Monday. Bullion ended August 3.5 percent higher as worries over China's slowing economy sparked safe-haven bids, although the metal has since come off a seven-week top.
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