In Asia gold weakens after Moody's downgrade of China

On Wednesday, gold slumped in Asia. It’s because Moody's Investors Service had China's credit rating downgraded to A1 from Aa3, thus modifying its outlook to stable from negative.

June delivery gold futures lost 0.30% in New York, hitting $1,251.69 a troy ounce. By the way, China and India are considered to be the leading gold importers in the world. Accordingly, a tumble in demand would apply pressure on market sentiment.

Market participants look ahead to the issue of the Fed’s minutes for its April gathering on Wednesday, just to find out whether the Fed’s outlook regarding monetary policy has been affected by recent economic data as well as geopolitical developments or not.

Overnight, gold futures pared revenues amid soaring expectations that the Fed would lift its benchmark rate in June that pushed the greenback off the minimums, denting demand for gold.

Currently, approximately 80% of market participants expect the Fed to lift interest rates in June, compared to just 67% of investors last week.

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