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Wednesday, July 18th, 2018 - Buy Gold - Bringing you trusted gold news and gold investing information since 2006

The Price of Gold Drops as Fitch Ratings Downgrades Italy and Spain

Gold went down in price by 1.1 per cent on Friday as it settled at $1,635.80 while it lost $17.40 per ounce as recorded at the COMEX division of the New York Mercantile Exchange possibly showing the distastes of investors for Europe’s debt burden as Fitch Ratings downgraded the credit ratings of Italy and Spain.

Gold closed the day with a price loss despite the commodity markets that opened early Friday with the hope of economic recovery occasioned by improvement in the US employment data for September which exceeded the expectations of analysts and had signalled a positive move for precious metals earlier in the day.

The palpable fear of credit crunch which many taught would result from the debt burden of the European nations had recently piled downward pressure on the price of gold as many investors sold some of their holdings in preference for cash thereby making gold look like it was failing in its role as a safe haven for wealth preservation. The Fitch Ratings that downgraded the credit ratings of Italy and Spain didn’t come unexpected but only worsened investors’ fear about the debt crisis currently rocking the European nations’ financial systems.

Jimmy Tintle, a broker with Transworld Futures, observed that investors seem to be comfortable with holding on to their wealth in cash considering the current instability in the commodity markets.  Presently, investors’ reactions to Europe’s debt overhang negate the trend as at last year when many rushed to buy gold when the bad news from the Eurozone broke out since gold has presently lost more than $300 per ounce making it look as if it is sinking in value like the paper currencies.

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