Gold gains after four-day drop
London, October 11, 2012
Gold rose on Thursday, arresting four straight days of declines, although a ratings agency downgrade to Spain's creditworthiness could weigh on the euro and, in turn, restrict gains in the bullion price.
The euro steadied after a drop driven by Standard & Poor's, which cut Spain's sovereign credit rating to BBB-, leaving the euro zone's fourth largest economy just one notch away from speculative territory.
Spot gold rose 0.4 percent on the day to $1,769.74 an ounce by 0955 GMT. The price had fallen by more than 2 percent over the prior four trading days, its longest stretch of declines since June this year.
Gold priced in euros rose for a fourth day in a row to within 1 percent of the record high of 1,386.38 euros an ounce struck on Oct. 1.
"Overnight, after the downgrade of Spain, gold went down but has held up nicely. We have been seeing a bit of demand coming out of the woodwork. It's nothing huge, but it was better than it has been previously and, since Monday, flows of gold scrap have been very, very low," MKS Finance head of trading Afshin Nabavi said.
"Overall, it feels as though we may have found a base for gold at the moment and now we have to try the higher end of the range at $1,775/80," he said.
Gold has risen by 13 percent in 2012 so far, making it one of the best-performing commodities this year, in spite of a lacklustre first half of the year.
Gold has risen by about $215 in 2012, with $165 in gains having materialised in the last two months alone, after the US Federal Reserve indicated, then outlined, its intention to resume buying bonds to prop up the economy.-Reuters