Futures Market News
Credit agency's warning influences gold futures downward
Dec 06, 2011 07:27 AM
Tuesday saw gold futures dropping in value amid worries about the euro zone nations' credit rating after Standard & Poor's threatened downgrades should high-level European meetings fail to devise a strong plan to deal with the sovereign debt crisis, according to Reuters.
Included within the scope of the credit rating service's warnings are the two top economies of the euro zone, Germany and France, both of which serve as regional pace-setters given their economic stature. A summit of the European Central Bank is among this week's meetings to address the scourge's damaging tendencies.
"Apparently, $1,750 is a tough resistance to break. The market is in need of strong fundamental impetus to break above this mark. Thursday could provide such an impetus as the ECB will meet for its policy meeting," states a note penned by analysts with Credit Suisse, as cited by Reuters. "Ahead of the ECB meeting, we think sideways trading is the most likely outcome."
At 8:08 a.m. on Tuesday, gold futures dropped 0.75 percent, a $13 loss to $1,721.50 per troy ounce.
The weakening rupee of India, which is the globe's top consumer of the yellowish metal, also reduced demand and pulled down gold futures, according to the International Business Times.
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