Investing.com - Gold futures were down for a second day on Tuesday, slumping to a four-day low as investors turned to the relative safety of the U.S. dollar after ratings agency Standard & Poor’s put 15 euro zone countries on watch for downgrades.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,725.65 a troy ounce during early European morning trade, dropping 0.54%.
It earlier fell by as much as 0.95% to trade at USD1,712.55 a troy ounce, the lowest price since November 30.
Gold futures were likely to find support at USD1,700.50 a troy ounce, the previous day’s low and resistance at USD1,766.95, the high of November 17.
In a statement released late Monday, S&P said that ratings could be cut by one level for triple-A rated countries Austria, Finland, Germany, Netherlands and Luxembourg and flagged a potential two-notch downgrade for France.
“Systemic stresses in the euro zone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the euro zone as a whole,” the ratings company said.
S&P added that it plans to announce any ratings changes “as soon as possible” after Friday’s European Union summit.
The warning came after French and German leaders outlined proposals to enforce stricter budget rules in the euro zone, to be discussed at Friday’s summit.
For much of the last year, investors' typical reaction to bad news from Europe was to buy gold, as it boosts the safe haven appeal of the precious metal, but that relationship has unraveled recently.
Instead, gold futures have moved largely in line with other commodities and risk-sensitive assets over the past month, with investors preferring the relative safety of the U.S. dollar.
The euro traded at a four-day low against the U.S. dollar, while the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.2% to trade at 78.88.
Elsewhere on the Comex, silver for March delivery shed 0.2% to trade at USD32.31 a troy ounce, while copper for March delivery tumbled 1.4% to trade at USD3.565 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,725.65 a troy ounce during early European morning trade, dropping 0.54%.
It earlier fell by as much as 0.95% to trade at USD1,712.55 a troy ounce, the lowest price since November 30.
Gold futures were likely to find support at USD1,700.50 a troy ounce, the previous day’s low and resistance at USD1,766.95, the high of November 17.
In a statement released late Monday, S&P said that ratings could be cut by one level for triple-A rated countries Austria, Finland, Germany, Netherlands and Luxembourg and flagged a potential two-notch downgrade for France.
“Systemic stresses in the euro zone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the euro zone as a whole,” the ratings company said.
S&P added that it plans to announce any ratings changes “as soon as possible” after Friday’s European Union summit.
The warning came after French and German leaders outlined proposals to enforce stricter budget rules in the euro zone, to be discussed at Friday’s summit.
For much of the last year, investors' typical reaction to bad news from Europe was to buy gold, as it boosts the safe haven appeal of the precious metal, but that relationship has unraveled recently.
Instead, gold futures have moved largely in line with other commodities and risk-sensitive assets over the past month, with investors preferring the relative safety of the U.S. dollar.
The euro traded at a four-day low against the U.S. dollar, while the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.2% to trade at 78.88.
Elsewhere on the Comex, silver for March delivery shed 0.2% to trade at USD32.31 a troy ounce, while copper for March delivery tumbled 1.4% to trade at USD3.565 a pound.