Investing.com – Gold futures moved lower in Asian trade Thursday, continuing a retreat from a near seven-week high, as fears of Italian debt insolvency rose after the nation’s bond yields soared to record levels.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,773.45 a troy ounce during early Asian trade, slipping 0.09%, after hitting a high of USDS1,775.45.
A day after the announced resignation of Italian Prime Minister Silvio Berlusconi Italian bonds rose above 7%, the same level at which Ireland, Portugal and Greece were forced to plead for rescue funds from international agencies.
A new Italian government faces implementation of deficit reduction measures to help tackle the nation’s public debt, currently at 120% of gross domestic product, second to Greece among euro-zone members.
Prime Minister Berlusconi, Tuesday, said he would resign once parliament passed the austerity bill, a USD63 billion package that convinced the European Central Bank to buy Italian bonds in an effort to reduce borrowing costs.
Shares on Wall Street tumbled on the prospects of an Italian default, with the Dow Jones Industrial Average slumping 3.2% to 11,780.90, the Nasdaq Composite Index sank 3.9% to 2,621.65, and the S&P 500 plummeted 3.7% to close at 1,229.10.
Meanwhile, market investors awaited news from Greece where the nation’s new coalition government remained undecided on a replacement for outgoing Prime Minister George Papandreou.
A rising dollar helped to depress gold futures, as a stronger greenback makes gold futures purchases more expensive for holders of other currencies.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.05% to 78.17.
On the Comex, silver for December delivery rose 0.29% to trade at USD34.18 a troy ounce, while copper for December delivery slid 0.08% to trade at USD3.393 a pound.