Forexpros – Gold futures declined for the first time in four days on Friday, easing off a four-week high after ratings firm Standard and Poor’s downgraded the sovereign credit ratings of nine euro zone countries, including France.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery settled at USD1,639.85 a troy ounce by close of trade on Friday, rising 1.59% over the week, the second consecutive weekly gain.
Gold futures were likely to find support at USD1,612.35 a troy ounce, the low of January 10 and resistance at USD1,662.85, the high of January 12.
S&P stripped France and Austria of their coveted triple-A ratings and slashed Italy, Spain, Portugal and Cyprus by two notches. Malta, Slovakia and Slovenia were downgraded by one notch, while Germany, Finland, Luxembourg, and the Netherlands kept their triple-A ratings.
Following the downgrades, France and Austria are now both rated at AA+. Italy is rated BBB+, Spain is at A and Portugal’s rating has been pushed into junk territory of BB.
“In our view, the policy initiatives taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the euro zone,” S&P said in a statement.
Meanwhile, talks aimed at negotiating a restructuring of Greece’s debts broke down on Friday, amid disagreements over how much money investors will lose by swapping their bonds, raising fears over a possible default.
The news saw risk aversion sharpen, boosting demand for the safe haven U.S. dollar. The euro dropped to a 16-month low against the greenback, while the dollar index gained 0.82% to settle at 81.72 by close of trade Friday, the highest level since September 2010.
Although gold’s appeal as a safe haven is boosted during times of economic uncertainty, the euro zone’s debt crisis has done little to bolster appetite for the precious metal in recent months. A weakening euro and stronger dollar have weighed on gold instead.
Gold futures rallied 2.35% in the three sessions ended Thursday, climbing to the highest level since mid-December as strong physical demand in Asia and the U.S. lifted prices.
Gold demand in China, the world’s second largest consumer, continued to pick up ahead of the Lunar New Year, which falls on January 23. On Wednesday, official data showed that China’s gold imports from Hong Kong surged to a record high 102,779 kilograms in November.
In India, the world’s biggest gold consumer, buyers took advantage of a drop in local prices to stock up ahead of the wedding season beginning later this month.
Meanwhile, the U.S. Mint said Wednesday that it sold 79,000 ounces of gold coins so far in the first ten days of January, topping the total sales in December of 65,500 ounces.
Elsewhere on the Comex, silver for March delivery settled at USD29.71 a troy ounce by close of trade on Friday, gaining 2.92% on the week, while copper for March delivery settled at USD3.643 a pound, rallying 6.35% over the week.
Copper futures were boosted after official data released earlier in the week showed that China’s copper imports in December surged to a record high 508,942 metric tons in December, up nearly 13% from the previous month.
In the week ahead, investors will be keeping a close eye on developments in the euro zone, amid concerns over the increased risk of sovereign debt contagion, while investors will also be looking ahead to U.S. data on inflation.
Comex floor trading will be closed on Monday, January 16 for the Martin Luther King Jr. holiday.
Source; http://www.dailymarkets.com/forex/2012/01/15/gold-futures-weekly-outlook-january-16-20/
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery settled at USD1,639.85 a troy ounce by close of trade on Friday, rising 1.59% over the week, the second consecutive weekly gain.
Gold futures were likely to find support at USD1,612.35 a troy ounce, the low of January 10 and resistance at USD1,662.85, the high of January 12.
S&P stripped France and Austria of their coveted triple-A ratings and slashed Italy, Spain, Portugal and Cyprus by two notches. Malta, Slovakia and Slovenia were downgraded by one notch, while Germany, Finland, Luxembourg, and the Netherlands kept their triple-A ratings.
Following the downgrades, France and Austria are now both rated at AA+. Italy is rated BBB+, Spain is at A and Portugal’s rating has been pushed into junk territory of BB.
“In our view, the policy initiatives taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the euro zone,” S&P said in a statement.
Meanwhile, talks aimed at negotiating a restructuring of Greece’s debts broke down on Friday, amid disagreements over how much money investors will lose by swapping their bonds, raising fears over a possible default.
The news saw risk aversion sharpen, boosting demand for the safe haven U.S. dollar. The euro dropped to a 16-month low against the greenback, while the dollar index gained 0.82% to settle at 81.72 by close of trade Friday, the highest level since September 2010.
Although gold’s appeal as a safe haven is boosted during times of economic uncertainty, the euro zone’s debt crisis has done little to bolster appetite for the precious metal in recent months. A weakening euro and stronger dollar have weighed on gold instead.
Gold futures rallied 2.35% in the three sessions ended Thursday, climbing to the highest level since mid-December as strong physical demand in Asia and the U.S. lifted prices.
Gold demand in China, the world’s second largest consumer, continued to pick up ahead of the Lunar New Year, which falls on January 23. On Wednesday, official data showed that China’s gold imports from Hong Kong surged to a record high 102,779 kilograms in November.
In India, the world’s biggest gold consumer, buyers took advantage of a drop in local prices to stock up ahead of the wedding season beginning later this month.
Meanwhile, the U.S. Mint said Wednesday that it sold 79,000 ounces of gold coins so far in the first ten days of January, topping the total sales in December of 65,500 ounces.
Elsewhere on the Comex, silver for March delivery settled at USD29.71 a troy ounce by close of trade on Friday, gaining 2.92% on the week, while copper for March delivery settled at USD3.643 a pound, rallying 6.35% over the week.
Copper futures were boosted after official data released earlier in the week showed that China’s copper imports in December surged to a record high 508,942 metric tons in December, up nearly 13% from the previous month.
In the week ahead, investors will be keeping a close eye on developments in the euro zone, amid concerns over the increased risk of sovereign debt contagion, while investors will also be looking ahead to U.S. data on inflation.
Comex floor trading will be closed on Monday, January 16 for the Martin Luther King Jr. holiday.
Source; http://www.dailymarkets.com/forex/2012/01/15/gold-futures-weekly-outlook-january-16-20/
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