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Forexpros – Gold futures moved higher in Asian trade Wednesday, recovering from a one-week low following a downgrade to Spain’s credit rating and report showing a cooling Chinese economy.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,658.25 a troy ounce during early Asian trade, gaining 0.33%, after hitting a low of USDS1,653.25.
On Tuesday, Moody’s Investors Service reduced Spain’s investment grade to A1 from AA2, with a negative outlook. On October 14 Standard & Poor’s downgraded Spain’s rating, following a Fitch Rating’s cut of Spain to its fourth highest investment grade on October 7.
“Spain continues to be vulnerable to market stress and event risk while already moderate growth prospects for the nation have been scaled back further,” Moody’s said in a statement following the announcement.
Moody’s also put France on three months notice saying that “pressure from weaker debt metrics,” could leave the country with a negative credit outlook and may even result in a downgrade.
In its Tuesday report, China’s National Bureau of Statistics reported that the nation’s gross domestic product for the third quarter rose 9.1% from a year earlier, down from a second-quarter reading of 9.5% growth and slightly below the 9.2% economist’s forecast.
Separately, the U.S. Commodities Futures Trading Commission on Tuesday voted to limit the number of commodities contracts that investors can hold in agriculture, energy or metals contracts, in a move designed to curb rampant speculative buying.
A higher dollar limited gains for gold futures, as a stronger greenback makes gold futures purchases more expensive for holders of other currencies.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up by 0.19% to 77.45.
On the Comex, silver for December delivery gained 0.14% to trade at USD31.87 a troy ounce, while copper for December delivery fell 0.81% to trade at USD3.353 a pound.
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