Forexpros – Gold prices firmed Wednesday as bottom fishers snapped up the metal, which had declined in recent trading on sentiment that the Standard & Poor’s ratings agency would make good on a threat to downgrade a key European emergency fund.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,732.95 a troy ounce during Asian trading, up 0.07% and just off from a session high of 1,735.35.
Gold futures were likely to find short-term support at USD1,704.75 a troy ounce, the low of November 30, and resistance at USD1,767.05, the high of December 2.
Standard and Poor’s on Tuesday threatened to downgrade the European Financial Stability Facitlity, an aid fund, a day after the agency said it might do the same to 15 European countries on the grounds the debt crisis is getting worse.
In Europe, finance ministers will meet Thursday and Friday to address proposals to consolidate fiscal policies and conduct them in a more centralized fashion.
While euro zone countries operate one currency under one Central Bank, fiscal policies such as taxation and government spending are left to individual governments.
Imbalances that arose under such a scenario helped fuel the current crisis, although faith that leaders will work out a solution to the crisis has been on the rise.
While gold traditionally acts as a hedge to weakening paper currenciies, the metal has tended to move in line with othe asset classes lately where the euro crisis has been concerned.
Elsewhere on the Comex, silver for March delivery dropped 0.44% to trade at USD32.60 a troy ounce, while copper for March was down 0.17% at USD3.574 a pound.
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