Investing.com - Gold futures were higher during European morning hours on Wednesday, as the U.S. dollar weakened in the wake of Moody’s decision not to downgrade Spain's credit rating.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,751.75 a troy ounce during European morning trade, gaining 0.3%.
Prices rose by as much as 0.45% earlier in the session to hit a daily high of USD1,754.95 a troy ounce, the strongest level since October 15.
Gold futures were likely to find near-term support at USD1,730.15 a troy ounce, the low from October 15 and resistance at USD1,774.95, the high from October 12.
The U.S. dollar was broadly lower against its major counterparts, after rating agency Moody's affirmed its Baa3 investment grade sovereign rating on Spain, easing fears of an imminent downgrade to junk status.
In a report, Moody’s expressed confidence that reforms enacted by the Spanish government and support from the euro zone would ensure that Madrid had continued access to the credit market.
The yield on Spanish 10-year bonds fell to 5.49% following the announcement, the lowest level since April.
Speculation that the debt-strapped nation was moving closer to requesting a bailout further supported sentiment, after Spanish government officials said earlier in the week they were exploring the option of requesting a credit line from the European Stability Mechanism, in order to satisfy the terms of the European Central Bank’s bond buying program.
Market players have been anticipating for the past month that the Spanish government would ask for a full-scale sovereign bailout.
A bailout would allow the ECB to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation. But Spain has been reluctant to do so because it may come with conditions on its budget.
European Union policymakers will hold a two-day summit in Brussels starting on Thursday to discuss ways to firewall and extinguish the debt crisis as well as Greece's steps towards fiscal recovery.
The euro rallied to a one-month high against the greenback on Moody’s decision, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, declined 0.3% to trade at 79.18, the lowest since September 21.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Elsewhere on the Comex, silver for December delivery rose 0.3% to trade at USD33.06 a troy ounce, while copper for December delivery added 0.25% to trade at USD3.709 a pound.
Copper traders were looking ahead to Chinese third quarter growth figures due out on Thursday, to gauge whether the world second largest economy is heading towards a hard or a soft landing.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,751.75 a troy ounce during European morning trade, gaining 0.3%.
Prices rose by as much as 0.45% earlier in the session to hit a daily high of USD1,754.95 a troy ounce, the strongest level since October 15.
Gold futures were likely to find near-term support at USD1,730.15 a troy ounce, the low from October 15 and resistance at USD1,774.95, the high from October 12.
The U.S. dollar was broadly lower against its major counterparts, after rating agency Moody's affirmed its Baa3 investment grade sovereign rating on Spain, easing fears of an imminent downgrade to junk status.
In a report, Moody’s expressed confidence that reforms enacted by the Spanish government and support from the euro zone would ensure that Madrid had continued access to the credit market.
The yield on Spanish 10-year bonds fell to 5.49% following the announcement, the lowest level since April.
Speculation that the debt-strapped nation was moving closer to requesting a bailout further supported sentiment, after Spanish government officials said earlier in the week they were exploring the option of requesting a credit line from the European Stability Mechanism, in order to satisfy the terms of the European Central Bank’s bond buying program.
Market players have been anticipating for the past month that the Spanish government would ask for a full-scale sovereign bailout.
A bailout would allow the ECB to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation. But Spain has been reluctant to do so because it may come with conditions on its budget.
European Union policymakers will hold a two-day summit in Brussels starting on Thursday to discuss ways to firewall and extinguish the debt crisis as well as Greece's steps towards fiscal recovery.
The euro rallied to a one-month high against the greenback on Moody’s decision, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, declined 0.3% to trade at 79.18, the lowest since September 21.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Elsewhere on the Comex, silver for December delivery rose 0.3% to trade at USD33.06 a troy ounce, while copper for December delivery added 0.25% to trade at USD3.709 a pound.
Copper traders were looking ahead to Chinese third quarter growth figures due out on Thursday, to gauge whether the world second largest economy is heading towards a hard or a soft landing.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.