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Gold cools gains on Moody's move to uphold Spanish debt ratings

Published 10/17/2012, 08:36 PM
Updated 10/17/2012, 08:38 PM
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Investing.com - Gold prices gave back earlier gains amid profit-taking during Asian trading on Thursday, as investors looked beyond a Moody's decision to stick with Spain's debt ratings.

Moody's Investors Service confirmed Spain's Baa3 government bond rating as well as the country's short-term rating at (P)Prime-3 earlier this week.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were down 0.16% at USD1,750.25 a troy ounce, up from a session low of USD1,749.45 and down from a high of USD1,751.35 a troy ounce.

Gold futures were likely to test support at USD1,744.15 a troy ounce, Wednesday's low, and resistance at USD1,754.95, Wednesday's high.

Moody's assigned a negative outlook to Spain's rating, though investors went long on higher-yielding currencies and sold off the dollar, gold's traditional hedge, amid a global risk-on trading session.

Market talk that Spain is growing closer to formally requesting financial assistance from its European neighbors bolstered gold as well.

Solid housing data out of the U.S. enticed investors to come out of safe-haven dollar positions, which sent gold gaining before profit-taking kicked in.

The U.S. Census Bureau reported earlier that housing starts rose 15% in September to a seasonally adjusted 872,000 units, far surpassing market calls for a 2.7% increase to 770,000.

The U.S. government added that the number of building permits issued in September rose 11.6% to a seasonally adjusted 894,000, beating out expectations for a 1.1% gain to 810,000.

Elsewhere on the Comex, silver for December delivery was down 0.19% and trading at USD33.168 a troy ounce, while copper for December delivery was down 0.07% and trading at USD3.742 a pound.








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