FX:Gold futures steady near 1-week high, euro zone debt woes in focus
Forexpros - Gold futures were steady near the previous session’s one-week high during European morning hours on Tuesday, as investors monitored developments surrounding the euro zone’s ongoing debt woes and the looming fiscal cliff crisis in the U.S.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,733.75 a troy ounce during European morning trade, nearly flat on the day.
Prices traded in a tight range between USD1,729.35 a troy ounce, the daily low and a session high of USD1,735.15 a troy ounce. Comex gold prices touched a one-week high of USD1,735.55 a troy ounce on Monday.
Gold prices were likely to find support at USD1,704.55 a troy ounce, the low from November 15 and near-term resistance at USD1,737.95, the high from November 12.
Ratings agency Moody’s downgraded France’s AAA-rating by one notch to AA1 late Monday and kept a negative outlook on the rating, citing weakening growth prospects for the euro zone’s second-largest economy.
The downgrade followed a similar move by Standard & Poor’s several months ago, leaving Fitch Ratings as the only ratings firm to keep France at triple-A.
Investors now looked ahead to of a meeting of euro zone finance ministers later in the day in Brussels to discuss whether Greece can receive its next installment of bailout funds.
Markets participants also continued to monitor developments surrounding the looming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.
U.S. and European equities rallied on Monday, as sentiment was bolstered after U.S. Congressional leaders said talks with President Barack Obama on Friday to avert the fiscal crisis were "constructive."
There are fears the U.S. economy will fall back into a recession, unless a divided Congress and the White House can work out a compromise in the seven weeks left before the January 1 deadline.
Meanwhile, the conflict between the Israelis and Palestinians continued for a sixth day, with both sides stepping up attacks in and around the Gaza Strip.
Elsewhere on the Comex, silver for December delivery eased up 0.1% to trade at USD33.19 a troy ounce, while copper for December delivery dipped 0.2% to trade at USD3.520 a pound.
