Gold rose Tuesday after Standard & Poor's downgraded Italy's debt, the latest in a series of blows to the eurozone and endorsements of precious metals, at least in the eyes of investors who want safe-havens.
The U.S. ratings agency late Monday cut the nation's sovereign debt one notch with a negative outlook, a day after European leaders failed in a weekend meeting to produce any plans to keep Greece, the weakest of the continent's debt-choked nations, from defaulting.
Standard & Poor's said Italy's economy was not growing enough to chip away at its national debt -- now 120 percent of its gross domestic product -- and the current government seems incapable of rising to the challenge. Further, the interest rate lenders now charge Italy has become prohibitively high.
Investors have become more bearish about Italy mainly because euro-zone leaders failed to create a firewall around the bloc's solvent governments, Nicholas Spiro, head of Spiro Sovereign Strategy, a London-based consulting firm, told Bloomberg. They let a crisis in the narrow periphery of the euro zone morph into one affecting the solvent core and we're now dealing with the consequences.
Gold on the New York futures exchange rose $17 to $1,795.90, and gold for immediate delivery added $7 to $1,789.51.
Silver on the New York futures exchange rose 33 cents to $39.50, and silver for immediate delivery fell 21 cents to $39.36.
Platinum on the New York futures exchange rose $9.60 to $1,781.60, and platinum for immediate delivery fell $2.76 to $1,778.51.