Gold takes breather after touching three-month high

Gold takes a breather on Thursday trading after rising to three-month high on Wednesday on expected further monetary easing by the Chinese government to bolster growth.

Data released yesterday showed that Chinese manufacturing sector contracted for the fourth straight month, raising expectations monetary easing policies would continue.

In the euro area, manufacturing and services activities showed a contraction in February as PMI composite advanced reading for February came in at 49.7 from the prior expansion of 50.5.

Today, there are some hopes the German business confidence will increase to seven month high as Greece's approved second bailout and drop yields on Italian and Spanish debt eased debt crisis.

IFO business climate is predicted to soar for the fourth consecutive month to 108.8 in February from 108.3 a month before.

Spot gold is currently around $1774.15 an ounce, after touching a high $1776.75 while the day's low was recorded at $1772.28.

Crude oil is also showing a slight decline, after rising for eight consecutive session, to trade around $106.00 a barrel, compared with the day's opening of $106.07.

The dollar index, which tracks the dollar movements versus six major currencies, slipped to hover around 79.06 from the day's opening of 79.19.