Moody's is concerned about Spain's high financing requirements for 2011. For its part, the country tried to reassure investors that it doesn't need any financial aid.
Meantime, the U.S. core Consumer Price Index proved to be a mixed bag for gold. The reading for November was in line with expectations of 0.1%, which brought inflation to 0.6% vs. a year ago. Gold is attractive in times of inflation so the lackluster data put a crimp in gold's safe-haven appeal.
On the flip side, low inflation means that the Federal Reserve will likely make no changes to its $600 billion bond-buying program and gives more weight to some analysts' predictions that the Fed will have to pursue more rounds of quantitative easing to keep the economy going.
The Fed's low-end inflation target is 2%, compared with China, the fastest growing country in the world, which just raised its inflation target to 4%.Daniel Wills, senior analyst at ETF Securities, says that near term inflation, led by the U.S., remains subdued but that price pressures in energy and food from emerging markets like China could color the worldwide inflation landscape over the long term. "This could spell higher inflation ahead." Silver prices shed 53 cents to $29.25 while copper ended down 7 cents to $4.13. The industrial metals were suffering over worries that debt problems and austerity measures in EU countries might crimp spending. That struggle will take center stage Wednesday in Ireland as the Parliament passed approval for its bailout money from the International Monetary Fund and EU. Gold mining stocks, a risky but potentially profitable way to buy gold, were drifting lower. Yamana Gold (AUY - Get Report) was down 1.19% to $12.42 while Goldcorp (GG - Get Report) was 0.89% lower at $45.75. Other large gold stocks Agnico-Eagle (AEM - Get Report) and Eldorado Gold (EGO - Get Report) were trading at $80 and $17.97, respectively.
|More on Gold Gold Price News|
|How to Invest in Gold|
>To contact the writer of this article, click here: Alix Steel. >To follow the writer on Twitter, go to http://twitter.com/adsteel. >To submit a news tip, send an email to: email@example.com.