Gold trims earlier losses after US data; crude down.

Commodities headed south following a run of poor manufacturing data from China, boosting concerns over a slowdown in demand from the world`s second largest economy. The euro area followed suit with the downbeat update, posting weaker-than-expected growth in the business activity in February, according to preliminary figures by Markit on Thursday. As of 08:51 ET:

On the bullion markets, Spot Gold  was down 0.25% at $1,316.34 an ounce. The metal fell as low as $1,307.41 earlier in the session, but pared losses after data pointed showed that the number of people who filed for unemployment benefits in the US last week fell last week and consumer price inflation rose in January, all in line with expectations. Other precious metals also traded lower, as follows:

-  Spot Silver  was down 0.66% at $21.68 an ounce

-  Spot Platinum  was down 0.70% at $1,415.00 an ounce

-  Spot Palladium  was nearly flat at $735.50

The Labor Department reported on Thursday that US initial jobless claims dropped 3,000 to 336,000 in the week-ended February 1 5. Analysts had expected a decrease to 335,000. A slowdown in dismissals could lay the groundwork for a pickup in hiring, and more jobs could translate to a boost in consumer spending.

An improving job market would support a turnaround in an economy held back by harsh winter weather that has slowed retail sales, employment and manufacturing production. The four-week average of jobless claims increased to 338,500 from 336,750 the week before.

Separately, a report showed that consumer inflation rose at a slower rate in January, indicating inflation is still subdued. The consumer price index (CPI) increased 0.1% after a 0.2% increase the month before, and matched expectations.

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