PRECIOUS-Gold eases as strong China factory data prompts profit booking

* Palladium rises for the fourth straight week
* The Caixin/Markit Manufacturing PMI for Oct. rises
* Applications for unemployment benefits in U.S. increase

(Updates prices)
By Diptendu Lahiri
Nov 1 (Reuters) - Gold eased on Friday as strong Chinese
factory data prompted investors to cash in some of the previous
session's more than 1% gains, while investors weighed up the
prospect of more Federal Reserve rate cuts.
Spot gold XAU= was a shade lower at $1,513 per ounce as of
0817 GMT, while U.S. gold futures GCcv1 were unchanged at
$1,515.30 per ounce. Spot gold is set to rise about 0.6% on a
weekly basis, after a 1% gain the previous week.
"We are seeing a little bit of profit booking in gold this
morning after the strong China manufacturing data, but I don't
see gold falling below $1,460 as the fundamentals still look
quite strong," said Kunal Shah, head of research at Nirmal Bang
Commodities in Mumbai, India.
China's factory activity expanded at the fastest pace in
over two years in October as new export orders rose and plants
ramped up production, a private business survey showed on
Friday. The better-than-expected results stand in contrast with an
official survey published on Thursday, which showed China's
factory activity shrank for the sixth straight month in October.
Meanwhile, the U.S. Federal Reserve on Wednesday lowered its
policy rate by a quarter of a percentage point. But the central
bank signalled there would be no further cuts unless the economy
takes a turn for the worse.
"The gold market looks pretty strong in the near term given
fresh uncertainty around the trade war and economic data from
the U.S. confirming the slowdown still lingering," said Janie
Simpson, managing director at ABC Bullion.
"Considering the economic slowdown still existing, investors
are expecting more rate cuts even though the Fed has pushed a
pause button."
A flattening yield curve indicates market participants
believe the U.S. Federal Reserve may be pausing its interest
rate cuts too soon. Asian shares fell on Friday on fresh concerns over Sino-U.S.
trade prospects and ahead of U.S. economic data, while the
dollar eased against major rivals. MKTS/GLOB
A near 16-month long trade war between China and the United
States has slowed global trade, stirred recession fears for some
economies and roiled financial markets.
Chile's decision to cancel the Nov. 16-17 Asia-Pacific
Economic Cooperation summit disrupted plans for the two to sign
an interim trade deal. U.S. President Donald Trump said they
would soon announce a new site to sign a "Phase One" agreement.
Holdings of the largest gold-backed exchange-traded fund
(ETF), New York's SPDR Gold Trust GLD , fell 0.19% on Wednesday
from Tuesday. GOL/ETF
Among other metals, silver XAG= was unchanged at $18.13
per ounce and platinum XPT= inched 0.1% higher to $932.73,
while palladium XPD= dipped 0.2% to $1,791.42 an ounce.
Palladium was set to record a fourth straight week of gains.