Gold rebounds sharply on Japan rate cut

Gold futures on the COMEX division of the New York Mercantile Exchange rebounded sharply on Monday as Moody downgraded Japan's credit rating.

The most active gold contract for December delivery rose 42.6 U. S. dollars, or 3.62 percent, to settle at 1,218.1 dollars per ounce.

Analysts noted that gold slide in the morning as Swiss voters on Sunday rejected a proposal to lift central bank gold holdings to 20 percent of its forex reserves, but it rebounded sharply by a weaker dollar and demand for safe haven after the early slump on Swiss gold vote.

Moody's Investors Services, a credit rating agency, downgraded Monday morning Japan's credit rating to a stable outlook in the wake of the delay of a national sales tax increase as a stimulus measure, as Prime Minister Abe works to stimulate his country's economy. Analysts said that this downgrade increased the demand for gold as a safe haven.

The U.S. dollar edged down against other major currencies on Monday as reports showed the country's manufacturing sector continued to expand but at a slower pace.

The dollar index, which tracks the greenback against six major currencies, was down 0.44 percent at 87.966 in late trading.

Additionally, U.S. stocks fell Monday to begin a new month in negative territory on selling pressure largely due to disappointing sales figures of the Thanksgiving holiday, pushing the investors turn to the gold futures in lower prices for safe haven.

Analysts also said that gold received support from the physical markets. The India central bank eased curbs on imports of gold on Friday, as main marriage season is around the corner in India, wedding demand of gold will go up sharply in Indian, one of the biggest gold consume country, Analysts added.

Silver for December delivery gained 113.6 cents, or 7.30 percent, to close at 16.692 dollars per ounce. Platinum for January delivery gained 30.3 dollars, or 2.50 percent, to close at 1,241.6 dollars per ounce.