PRECIOUS-Gold gets a safety boost as Fitch US downgrade shakes markets

PRECIOUS-Gold gets a safety boost as Fitch US downgrade shakes markets

Shafaq News/ Gold climbed on Wednesday as the U.S. dollar, Treasury yields and Asian stocks stumbled after Fitch downgraded the United States' coveted triple-A credit rating, souring confidence in the economy and shoring up interest in safe-haven bullion.

Spot gold XAU= was up 0.2% at $1,946.97 per ounce by 0312 GMT, while U.S. gold futures GCcv1 rose 0.3% to $1,984.

Fitch after the Wall Street close on Tuesday downgraded the U.S. government's credit rating from AAA to AA+, citing fiscal deterioration over the next three years and growing general government debt burden. USD/US/

"Last time S&P downgraded in 2011, the markets went nuts, although we are not seeing the same type of reaction in the early going, but things bear watching," said Edward Meir, a metals analyst who provides research for Marex.

Gold, which is priced in dollars, is a favoured safe-haven investment in times of stress and economic uncertainty.

Gold dropped 1% and hit a three-week low on Tuesday as the dollar firmed after a relatively solid data on U.S. manufacturing and construction in June offset a decline in job openings last month.

Focus remains on Friday's non-farm payrolls report, a key barometer of the health of the U.S. economy, with expectations that it would rise by 200,000 jobs in July after increasing by 209,000 in June.

U.S. central bankers have expressed hope they can beat inflation without cratering the job market, though they also said doing so will require keeping rates high for some time.

Higher interest rates raise the cost of holding gold, which yields nothing and needs money to store and insure.

In other metals, spot silver XAG= eased 0.2% to $24.29, platinum XPT= dropped 0.5% to $926.18, and palladium XPD= was down 0.1% at $1,238.59.


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