Daily Gold Update

Source: Marketwatch

New York— Gold futures finished higher on Tuesday, as slight dollar gains failed to lift the U.S. currency far off 15-month lows, while worries about the U.K.'s credit rating lifted gold's appeal as a safe asset. Gold for December delivery gained $1.10, or 0.1%, to finish at $1,102.50 an ounce on the New York Mercantile Exchange. On Monday, the contract finished above $1,100 for the first time, after hitting an intraday record high of $1,111.70 in electronic trading.

Monday's bullish action in metals played in part off news that Group of 20 leaders over the weekend signaled continued support for stimulus measures to shore up the global economy. The dollar index, a measure of the greenback against a trade-weighted basket of rival currencies, rose to 75.035, recovering after having slumped to 74.930 on Monday — a level last seen in August 2008. A warning from Fitch Ratings that among major economies, the U.K. is most at risk of losing its AAA sovereign credit rating, helped revive risk aversion and fueled safe-haven gains for the dollar, holding down commodity prices in turn, according to BMO Capital Markets. According to analysts at GoldCore, however, the precious metal would likely gain should such a U.K. ratings downgrade occur. "If this were to happen, sterling would lose further ground to the major currencies, prompting prudent investors to buy gold and utilize its currency hedging properties," they wrote in a note. See full story.