Gold and silver traded steady on Monday

Spot gold traded steady on Monday, weighed down by a strong dollar after mass downgrades of euro zone nations by Standard & Poor’s on Friday, while its safe haven appeal could benefit from renewed fears about the euro zone debt crisis.

Gold posted its biggest one-day drop in 2- weeks on Friday, as Franceand Austria were stripped of their coveted trip-A ratings amid S&P’s downgrades of nine euro zone nations, and Greece’s talks with creditor banks stalled.

The single currency declined to its lowest since August 2010 against the dollar, and was expected to remain under pressure.

“There are a lot of risks still ahead of us and we don’t think gold has priced in these risks,” said Jeremy Friesen, commodity strategist at Societe Generale. “It (the downgrades) is one of the incremental pushes for gold to appreciate.”

Gold’s climb will face the headwind of a strong dollar, but the appreciation of the greenback may not last long, he added.

Spot gold was little changed at $1,640.31 an ounce by 10:14 p.m. EST, flirting with the 200-day moving average just below $1,638.

Prices rallied nearly 5 percent this year, boosted by safe haven bids on troubles in the euro zone and tension between Iran and the West over the past two weeks.

U.S. gold gained 0.6 percent to $1,641.20.

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Posted by admin on Jan 16 2012. Filed under Gold price. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry