Gold Picks up on Downgrade of Ireland Sovereign Credit -Shanghai Metals Market

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Gold Picks up on Downgrade of Ireland Sovereign Credit

Data Analysis 09:17:55AM Dec 10, 2010 Source:SMM

CHICAGO, Dec. 10 -- Gold futures on the COMEX Division of the New York Mercantile Exchange on Thursday rebounded from a 2- day dip, as concerns over EU debt crisis intensified after Fitch Ratings downgraded the sovereign credit of Ireland.

The most active gold contract for February delivery hiked 9.6 U. S. dollars per ounce, or 0.7 percent, to settle at 1,392.8 dollars.

Fitch Ratings reduced Ireland's rating by three notches to BBB+ , the third-lowest investment-grade rating, citing the costs of restructuring the country's banking system and the loss of access to affordable funding in the market.

Market traders noted that the credit slash further intensified worries over EU debt crisis and thus, pushed more funds into gold market.

Before Thursday, gold price had suffered a 2-day drop, losing 2. 3 percent, which, according to analysts, was on a temporary pause after hitting a record.

An analyst noted that gold should remain in demand as a "safe haven," not least because of the persistent uncertainty about the debt crisis in euro zone peripheral countries and some investors also took the opportunity to buy as prices fell below 1,400 dollars.

However, the increasing cash-in of gold holding by the yearend could still weigh on the market in the short term. Some market watchers noted that gold's gains may be limited for the rest of the year as traders book their profits.

Silver for March delivery climbed 56.5 cents, or two percent, to 28.817 dollars per ounce. Meanwhile, January platinum fell 2.5 dollars, or 0.15 percent, to 1,678.9 dollars per ounce.

 

Gold Picks up on Downgrade of Ireland Sovereign Credit

Data Analysis 09:17:55AM Dec 10, 2010 Source:SMM

CHICAGO, Dec. 10 -- Gold futures on the COMEX Division of the New York Mercantile Exchange on Thursday rebounded from a 2- day dip, as concerns over EU debt crisis intensified after Fitch Ratings downgraded the sovereign credit of Ireland.

The most active gold contract for February delivery hiked 9.6 U. S. dollars per ounce, or 0.7 percent, to settle at 1,392.8 dollars.

Fitch Ratings reduced Ireland's rating by three notches to BBB+ , the third-lowest investment-grade rating, citing the costs of restructuring the country's banking system and the loss of access to affordable funding in the market.

Market traders noted that the credit slash further intensified worries over EU debt crisis and thus, pushed more funds into gold market.

Before Thursday, gold price had suffered a 2-day drop, losing 2. 3 percent, which, according to analysts, was on a temporary pause after hitting a record.

An analyst noted that gold should remain in demand as a "safe haven," not least because of the persistent uncertainty about the debt crisis in euro zone peripheral countries and some investors also took the opportunity to buy as prices fell below 1,400 dollars.

However, the increasing cash-in of gold holding by the yearend could still weigh on the market in the short term. Some market watchers noted that gold's gains may be limited for the rest of the year as traders book their profits.

Silver for March delivery climbed 56.5 cents, or two percent, to 28.817 dollars per ounce. Meanwhile, January platinum fell 2.5 dollars, or 0.15 percent, to 1,678.9 dollars per ounce.