Forexpros – Gold futures regained strength on Wednesday, after rating agency moody’s downgraded Italy’s sovereign debt rating, while reports that European Union finance officials were looking at a bank recapitalization plan limited gains.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,625.55 a troy ounce during late Asian trade, gaining 0.59%.
It earlier rose by as much as 0.8% to trade at a daily high of USD1,636.35 a troy ounce.
Gold’s safe haven appeal was boosted after Moody’s downgraded Italy’s sovereign credit rating by three notches to A2 from AA2, citing a “material increase” in long-term funding risks for euro area sovereigns with high levels of public debt.
Meanwhile, lingering concerns over a Greek debt default continued to support prices after a decision on the country’s next tranche of aid was delayed until mid-November.
However, a Financial Times report saying that euro zone finance ministers are looking into ways to coordinate the recapitalization of European lenders, boosting hopes that euro zone policy makers will do more to support the region’s banking system.
Some mild bargain buying also lent support, after gold prices dropped nearly 2.2% during the previous session.
German lender Deutsche Bank said in a report Tuesday that the precious metal market was “trading upon headlines and breaking news could send gold rapidly in either direction”.
The lender added that it continues to favor gold, as it is poised to be the main beneficiary of the current unstable macroeconomic environment.
Elsewhere on the Comex, silver for December delivery fell 1.82% to trade at USD29.29 a troy ounce, while copper for December delivery climbed 1.04% to trade at USD3.136 a pound.
Forexpros
