Investing.com - Gold futures edged higher during European morning hours on Thursday, bouncing off the previous session’s two-week low as fears over the handling of the euro zone's financial crisis were underpinned after Standard & Poor's downgraded Spain's sovereign-debt rating to one level above junk.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,771.35 a troy ounce during European morning trade, adding 0.35%.
Prices rose by as much as 0.4% earlier in the session to hit a daily high of USD1,771.85 a troy ounce. Gold futures touched a two-week low of USD1,758.85 a troy ounce on Wednesday.
Gold prices were likely to find short-term support at USD1,755.35 a troy ounce, the low from September 27 and resistance at USD1,781.55, the high from October 9.
Standard & Poor’s cut Spain’s credit rating by two notches to BBB-minus late Wednesday, and maintained a negative outlook on the debt-troubled country, citing mounting economic and political risks.
The ratings agency also warned that the capacity of Spanish political institutions to deal with the challenges presented by the current fiscal and economic crisis is declining.
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 European Central Bank 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.
Gold’s initial reaction to the downgrade was to move lower, as the dollar strengthened, however the greenback moderated gains as the session progressed.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.07% to trade at 80.05, paring an earlier gain of as much as 0.37% to 80.30.
Gold prices often move inversely to the U.S. dollar, as gold becomes less expensive for buyers using other currencies.
Elsewhere on the Comex, silver for December delivery rose 0.55% to trade at USD34.29 a troy ounce, while copper for December delivery advanced 0.6% to trade at USD3.739 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,771.35 a troy ounce during European morning trade, adding 0.35%.
Prices rose by as much as 0.4% earlier in the session to hit a daily high of USD1,771.85 a troy ounce. Gold futures touched a two-week low of USD1,758.85 a troy ounce on Wednesday.
Gold prices were likely to find short-term support at USD1,755.35 a troy ounce, the low from September 27 and resistance at USD1,781.55, the high from October 9.
Standard & Poor’s cut Spain’s credit rating by two notches to BBB-minus late Wednesday, and maintained a negative outlook on the debt-troubled country, citing mounting economic and political risks.
The ratings agency also warned that the capacity of Spanish political institutions to deal with the challenges presented by the current fiscal and economic crisis is declining.
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 European Central Bank 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.
Gold’s initial reaction to the downgrade was to move lower, as the dollar strengthened, however the greenback moderated gains as the session progressed.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.07% to trade at 80.05, paring an earlier gain of as much as 0.37% to 80.30.
Gold prices often move inversely to the U.S. dollar, as gold becomes less expensive for buyers using other currencies.
Elsewhere on the Comex, silver for December delivery rose 0.55% to trade at USD34.29 a troy ounce, while copper for December delivery advanced 0.6% to trade at USD3.739 a pound.