Forex News – Gold futures fluctuated between gains and losses in volatile trade on Wednesday, as concerns over the euro zone’s sovereign debt crisis remained in focus, while a broadly stronger U.S. dollar also weighed.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,614.05 a troy ounce during U.S. morning trade, easing down 0.1%.
It earlier fell by as much as 1% to trade at a daily low of USD1,599.35 a troy ounce. The December contract rose by as much as 0.8% to USD1,636.35 an ounce during the Asian trading session.
Earlier Wednesday, the International Monetary Fund said in a report that effects of the euro zone debt crisis are spreading to the core countries and to the region’s banking sector and warned that another recession could not be ruled out.
The IMF added that it could buy Spanish or Italian bonds alongside the euro zone bailout fund, the European Financial Stability Facility, to help boost investor confidence in those countries.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.36% to trade at 79.71.
Gold prices often move inversely to the U.S. dollar, as gold becomes more expensive for buyers using other currencies.
Some mild bargain buying also lent support, after gold prices dropped below USD1,600 an ounce.
Global financial service provider Deutsche Bank said in a report earlier that investors remained wary of jumping in to the gold market after recent heightened volatility.
The report said that there is not going to be a clear direction for gold at the moment, while adding that, "To some extent the market is just a bit broken, and needs to repair itself.”
Gold prices advanced during the Asian trading session, after ratings agency Moody’s downgraded Italy’s sovereign credit rating by three notches to A2 from AA2.
Lingering fears over a Greek debt default continued to lend support after a decision on the country’s next tranche of aid was delayed until mid-November.
Elsewhere on the Comex, silver for December delivery shed 0.3% to trade at USD29.75 a troy ounce, while copper for December delivery slumped 0.93% to trade at USD3.075 a pound.
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