By FX Empire.com
Gold prices gained on Tuesday in volatile trading, as fears eased over the outlook of the U.S. budget after rating agencies Standard & poor’s and Moody’s Investors Service confirmed they won’t downgrade the credit rating of U.S. debt, which overshadowed the slower than expect growth in U.S. GDP, where the U.S. economy expanded in the third quarter by 2.0% down from the prior estimate of 2.5%.
The U.S. dollar fell against major currencies on Tuesday, which provided gold prices with some bullish momentum and rebound to the upside, where investors risk appetite improved slightly, allowing dollar denominated assets to rise.
Traders will continue to monitor the developments from Europe regarding the debt crisis, where rising yields in Europe suggest investors are concerned amid the uncertainty that is surrounding the outlook of the EU debt crisis. Traders will be also eyeing the latest developments regarding the budget deficit deal and how U.S. lawmakers will tackle the budget deficit. Moreover, traders will be eyeing the income report, which is expected to show that personal income and spending continued to improve in October, while the University of Michigan confidence index is expected to show slight improvement in November.
Accordingly, we should expect heavy fluctuations to continue to dominate gold prices over the coming period, and if the U.S. dollar extends its gains, gold prices are likely to remain under pressure as a result, since the U.S. dollar is still trading near its highest level in six weeks.
Originally posted here
