Metals News
Gold Further Hikes on EU Debt Worries
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09:57AM
Dec 22,2010
Source:SMM

CHICAGO, Dec.22 -- Gold futures on the COMEX Division of the New York Mercantile Exchange on Tuesday further hiked, as Fitch Ratings said it may lower its rating for Greece, fueling concern about the scope of the European sovereign-debt crisis.

The most active gold contract for February delivery gained 2.7 dollars per ounce, or 0.2 percent, to settle at 1,388.8 dollars.

Fitch Ratings said it would review Greece's "fiscal sustainability" in 2011's January and there is a "heightened probability" of a downgrade after the review, which intensified concerns over sovereign-debt crisis in the European region and acted as the main supporting factor for gold market after tensions in the Korean Peninsula eased.

Fitch Ratings said in a statement on Tuesday that the assessment will focus on government measures to lower the budget deficit, the economic outlook and the "political will and capacity of the Greek state"to push through austerity measures.

Fitch currently rates Greece at "BBB-", its lowest investment- grade rating and the rating would fell into the non-investment grade given another cut. Besides, Moody's also said it may cut the ratings on Spanish banks. Speculation has also risen that France and Belgium may face cuts in sovereign rating.

Gold, which has gained by 25 percent this year, is heading toward a fifth successive month of gains, partly driven by the debt crisis in Europe.

Silver for March delivery increased 3.9 cents, or 0.13 percent, to 29.394 dollars per ounce. Meanwhile, January platinum gained 11. 2 dollars, or 0.655 percent, to 1,721.9 dollars per ounce.

 

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