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Forexpros – Gold futures traded higher in Asian trade Thursday, as investor appetites for safe-havens remained in play in light of continued uncertainty over the fate of Europe’s sovereign debt crisis.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,644.55 a troy ounce during early Asian trade, adding 0.07%, after hitting a low of USDS1,637.45.
Earlier Wednesday, the Financial Times reported that European bank regulators will conduct a new round of evaluations on regional banks, in an attempt to avert a shock to the region’s financial system if Greece defaults.
The report followed a release from the International Monetary Fund saying that the effects of euro-zone debt were spreading to other core countries and regional banks, warning that another recession was a possibility.
The IMF added that it was prepared to buy Spanish and Italian bonds, in conjunction with the European Financial Stability Facility bailout fund, in order to solidify investor confidence.
Further supporting gold was the move by Moody’s investor service late Tuesday, to cut Italy’s credit rating for the first time in nearly two decades, from AA2 to A2, citing weak growth as an impediment to Italy’s ability to reduce its debt.
Meanwhile, payroll processing firm ADP said that the U.S. economy added 91,000 non-farm jobs in September, a slight gain from a revised 89,000 the previous month, and above market expectations of a 70,000 increase.
The ADP report also noted that employment in the service sector gained 90,000 in September, the 21st consecutive month of gains.
The encouraging labor numbers lifted Wall Street shares for a second day; The Dow Jones Industrial Average added 1.21% to 10,940, the Nasdaq Composite Index rose 2.32% to 2,460.51, and the S&P 500 was lifted 1.79% to end the day at 1,144.03.
Elsewhere, financial service provider Deutsche Bank said in its report earlier that investors remained wary of jumping into the gold market after recent heightened volatility.
The report said there was no clear direction for gold at the moment adding that, “To some extent the market is just a bit broken, and needs to repair itself.”
On the Comex, silver for December delivery dropped 0.34% to trade at USD30.44 a troy ounce, while copper for December delivery gained fractionally by 0.03% to trade at USD3.140 a pound.
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