Daily Gold Update

Source: Marketwatch

San Francisco— Gold futures closed higher Thursday as lower equities and a swirl of rumors that Germany might be next to get a sovereign-debt downgrade contributed to renewed nervousness in the markets. The yellow metal had spent most of the trading day extending losses, hit by a margin-requirement increase and as investors lost heart that economic stimulus is forthcoming. Gold for December delivery added $5.90, or 0.3%, to finish at $1,763.20 an ounce on the Comex division of the New York Mercantile Exchange. It had traded as low as $1,705.40 an ounce � some $187 below Monday�s record settlement of $1,891.90 an ounce.

Markets were abuzz with talks of a potential credit downgrade for Germany. All three of the major rating agencies � Moody�s, Standard & Poor�s and Fitch � reportedly affirmed their top-notch ratings for Europe�s largest economy. Whether there�s any truth to it is irrelevant, according Bill O�Neill, a principal with Logic Advisors. �It�s a shoot first and ask questions later� market mentality, he said. �Clearly there has been a liquidation of excessive long positions,� O�Neill added. �But if you really look at the fundamental factors driving uncertainty and fears, it�s all still there. … All it takes is some rumor, some little rumbling� to send people to the perceived safety of gold. See full story.