Forexpros – Gold prices dropped Friday as talk that the Standard & Poor’s ratings agency is planning on downgrading France sent investors rushing to the dollar, a traditional hedge to gold.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,635.85 a troy ounce, down 0.72%.
Gold futures were likely to test support at USD1,625.85 a troy ounce, an earlier Friday low, and resistance at USD1,662.85, Thursday’s high.
In Europe on Friday, media reports surfaced that the Standard & Poor’s ratings agency was set to downgrade France.
Talk of such a move sent investors selling the euro and racing toward the dollar, a safe-haven asset class.
Gold, a hedge to the dollar, took a hit as investors ditched the precious metal as they snapped up greenback positions.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.90% at 81.78 in mid-session Friday trading.
Elsewhere on the Comex, silver for March delivery fell 1.40% to trade at USD29.703 a troy ounce, while copper for March delivery traded down 0.48% to trade at USD3.631 a pound.
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