European chaos, liquidity pressure suppresses gold prices

On Thursday (November 24) in the Asian market, international spot gold rose slightly and then fell back to maintain fluctuations in a narrow range, currently trading at around 1690 US dollars. The decline in the stock market driven by the euro zone debt crisis prompted investors to sell gold to make up for losses, but the weakness of the US dollar index provided support for gold prices.

On Wednesday (November 23), spot gold closed at $1,692.40 per ounce, down $6.86 per ounce, down 0.40%.

German government bond auctions on Wednesday were ineffective. Investors were concerned that the European debt crisis hit the euro zone leader Germany, and the interest rate spread between Belgium and German government bonds expanded to the highest level since the introduction of the euro area, the European debt crisis like a plague-like spread Market fears rose dramatically. And it seems that the final solution to the European debt crisis, the euro zone common bond, has also met with strong opposition from Germany. At present, the situation in Europe has become a mess, and the pressure of liquidity has forced investors to sell gold and suppress gold prices.

The rating agency was not idle. On Wednesday, Fitch issued a warning to France's AAA rating. S&P also said that if the euro area is recessed, it will increase the pressure on the regional sovereign rating downgrade. After the U.S. Congress failed to reach a deficit reduction agreement and was forced to start the deficit reduction mechanism on Wednesday, Moody’s stated that the United States reduced the scale of deficit reduction or its sovereign rating on the crisis. The three major rating agencies have spoken loudly one after another, further suppressing risk appetite and deteriorating gold prices.

However, the weakness of the Asian City's US index provided some support for the price of gold. In the Asian market, the US index maintained its pattern of a narrow range of shocks and is currently trading at the 78.90 line.

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