Investing.com – Gold futures firmed near an eight-day high on Wednesday, as the safe-haven appeal of the precious metal was boosted after ratings agency Moody’s downgraded Portugal’s sovereign debt rating to junk status.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,515.35 a troy ounce during late Asian trade, easing down 0.09%.
The gold contract traded between a range of USD1,512.65, the daily low and USD1,519.05, which was the highest price since June 24.
On Tuesday, ratings agency Moody's downgraded Portugal's credit rating by four notches to Ba2, or junk grade, on the growing risk the country will need a second round of financing before it can return to capital markets.
Gold is often considered a refuge from financial risk and a haven in times of economic uncertainty.
Gains were limited as the U.S. dollar rose to a one-week high against the euro, while the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged 0.15% higher to trade at 75.11, the highest level since June 29.
A stronger dollar saps demand for raw materials as an alternative investment and makes metals priced in the currency more expensive in terms of other monies.
Meanwhile, data released by the International Monetary Fund on Tuesday showed that Greece’s central bank bought 1,000 troy ounces of bullion, increasing gold reserves to 3.584 million ounces in May.
If bought at average spot market value during May, the purchase would have cost USD1.51 million.
Global financial service provider Deutsche Bank said in a report Tuesday that it expected gold prices to average USD1,630 in 2012 as “a weak U.S. dollar, negative real interest rates and ongoing central bank diversification into gold will sustain a constructive outlook for the sector."
Elsewhere, silver for September delivery added 0.35% to trade at a nine-day high of USD33.69 a troy ounce during, while copper for September delivery dipped 0.2% to trade at USD4.328 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,515.35 a troy ounce during late Asian trade, easing down 0.09%.
The gold contract traded between a range of USD1,512.65, the daily low and USD1,519.05, which was the highest price since June 24.
On Tuesday, ratings agency Moody's downgraded Portugal's credit rating by four notches to Ba2, or junk grade, on the growing risk the country will need a second round of financing before it can return to capital markets.
Gold is often considered a refuge from financial risk and a haven in times of economic uncertainty.
Gains were limited as the U.S. dollar rose to a one-week high against the euro, while the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged 0.15% higher to trade at 75.11, the highest level since June 29.
A stronger dollar saps demand for raw materials as an alternative investment and makes metals priced in the currency more expensive in terms of other monies.
Meanwhile, data released by the International Monetary Fund on Tuesday showed that Greece’s central bank bought 1,000 troy ounces of bullion, increasing gold reserves to 3.584 million ounces in May.
If bought at average spot market value during May, the purchase would have cost USD1.51 million.
Global financial service provider Deutsche Bank said in a report Tuesday that it expected gold prices to average USD1,630 in 2012 as “a weak U.S. dollar, negative real interest rates and ongoing central bank diversification into gold will sustain a constructive outlook for the sector."
Elsewhere, silver for September delivery added 0.35% to trade at a nine-day high of USD33.69 a troy ounce during, while copper for September delivery dipped 0.2% to trade at USD4.328 a pound.