Gold prices remained under pressure on Tuesday, as fears continued to dominate global financial markets over the outlook of the European debt crisis after rating agency Standard & Poor’s announced it could downgrade the credit rating of 15 euro zone countries including Germany and France. Standard & Poor’s also signaled it could downgrade the credit rating of the European Financial Stability Facility EFSF.
Investors opted to stay away from gold amid the levels of volatility in markets and due to the huge uncertainty that is surrounding the outlook, where gold prices continue to fluctuate heavily, which forced investors away from gold, since it had lost its safe haven appeal due to rising volatility in markets.
Traders will continue to monitor the developments from Europe regarding the debt crisis, where the focus will turn to the EU summit, as European leaders continue their efforts to find a resolution to the debt crisis.
Accordingly, we still expect volatility to continue to dominate gold prices over the course of this week, as investors will be also eyeing the ECB meeting later in the week amid rising pressures from investors for a bigger role for the ECB to ease the debt crisis.
Originally posted here
