Gold prices declined in spite of weakness in the U.S. dollar
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The gold price held firm yesterday after Standard & Poor’s downgraded the European Financial Stability Facility (EFSF) to AA from AAA. The ratings agency cited the weakening creditworthiness of several nations providing financial guarantees to the EFSF as a key reason for the downgrade. RBC Capital Markets’ George Gero wrote in a note to clients that “The downgrades of the euro-zone countries means fiscal stimulus is not far behind.” Gero added that the price of gold will continue to be supported by currency devaluation concerns emanating from such stimulus measures.
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