Forexpros – Gold futures were steady on Thursday, as traders remained cautious ahead of closely-watched Spanish and French bond auctions scheduled later in the day.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,762.85 a troy ounce during European morning trade, easing down 0.08%.
The gold contract traded between a range of USD1,758.55 a troy ounce, the daily low and USD1,768.05, the daily high.
Later in the day, Spain was due to auction up to EUR4 billion of 10-year bonds in what would be viewed as a key test of market appetite for the country’s sovereign debt.
The yield on Spanish 10-year bonds rose to 6.67% ahead of the auction, a euro-lifetime high.
Meanwhile, France was to auction up to EUR7 billion in government bonds, amid growing fears that Europe’s debt woes will spread to the region’s core economies. French 10-year yields hit 3.76% in early European trade, hovering just below a record high of 3.78% it hit on April 8.
Italy continued to remain in focus, with the country’s 10-year government bond yields climbing to 7.11%, a level widely viewed as unsustainable in the long-term.
Markets were also jittery after ratings agency Fitch’s warned late Wednesday that the ratings of major U.S. lenders could be “greatly affected” should Europe’s debt woes worsen.
Despite the recent slump in prices, Wall Street investment bank Morgan Stanley expects gold to rally in 2012 as “Europe’s sovereign debt crisis continues to roil financial markets, spurring demand for the metal as a haven asset.”
In a report published Wednesday, the bank said that gold prices could rise to an all-time high of USD2,200 an ounce in the first half of 2012, as “the euro zone crisis shows no sign of being close to a resolution and the contagion risk spreading across Europe is just beginning.”
Elsewhere on the Comex, silver for December delivery shed 0.38% to trade at USD33.69 a troy ounce, while copper for December delivery fell 0.92% to trade at USD3.453 a pound.