Gold ends run of declines but tough days loom
By Amanda Cooper, Reuters
October 12, 2012, 12:01 am TWN
LONDON--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 eurozone's fourth largest economy just one notch away from speculative territory.
Spot gold rose 0.4 percent on the day to US$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 US$1,775/80,” he said.