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Gold, silver recoup as Moody`s says US may face downgrade
By icn.com
Gold edged up on Tuesday trading session after seven sessions of losses as Moody’s said U.S. policy makers must address rising debt ratio to avoid a a 2013 credit-rating downgrade, boosting gold’s safe-haven appeal.
Gold ended higher on Monday after U.S. dollar weakened following Moody’s Investors Service comments where they said that the U.S. may face a credit downgrade. According to bloomberge, Moody`s said policy makers in the U.S. must adress the rising debt loads forecasted to further increse later this decade.
As of (09:07 GMT+3) gold for immediate delivery gained 0.94 percent or 13.08 points to trade at $1,397.89 after opening at $1,393.72, having earlier hit a low of $1,384.06, and a high of $1,401.27.
Gold dropped sharply on Monday after some Federal Reserve officials said the central bank should end its stimulus for the U.S. economy, slashing gold’s appeal as a hedge against inflation.
Chicago Fed President Charles Evans said yesterday the Fed could continue on its bond-buying program through the summer, yet it may end it by autumn if improvement in jobs markets remained evident.
Meanwhile, Dallas Federal Reserve’s President Richard Fisher said on Tuesday that a scale back for the Fed’s monthly $85 billion in bond purchases should be the key, as halting it would be “too violent for the market.”
Fisher`s comment came days after the Federal Reserve Bank of San Francisco’s President John Williams said that quickening economic growth and an improving jobs market may prompt the central bank to start pulling its $85 billion of monthly bond purchases by summer.
Fed Chairman Ben S. Bernanke is scheduled to testify before the Joint Economic Committee of Congress on Wednesday for clues about recent talks over tightening the central bank`s monetary policy. Minutes from the Fed’s last meeting are due to be released on Wednesday as well.
The USDIX is currently trading around 83.89 after opening at 83.87, after hitting a high of 84.10 and a low of 83.87.
Silver recovered from Monday`s early dive when it hit 2-1/2-year on concern that economic growth is slowing in China. As of (09:11 GMT+3) silver rose 0.61 percent or 0.14 points to trade at 22.82 after opening at 22.90, having earlier hit a high of 22.92, and a low of 22.44.
Gold holdings in the SPDR Gold Trust stood at 1,031.50 tones on Monday, the lowest in more than four years. While holdings of the largest silver ETF, the iShares Silver Trust are at the lowest since mid-January, reports showed.
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