NEW YORK: While Wall Street tumbled with the news of the assassination of Benazir Bhutto, the tragic event has pushed up gold prices and is not expected to affect Pakistan's credit rating.
Gold futures hit a new one-month peak in US trading on Thursday as the falling dollar and Bhutto slaying drove investors towards safe-haven assets.
Most-active gold futures for February GCG8 were up $1.90, or 0.2 percent, at $831.40 an ounce on the COMEX metals division of the New York Mercantile Exchange by 11 a.m. EST, after rising to $834.70 -- a new peak since Nov 27.
The dollar's fall against the euro after a weaker-than-expected US durable goods report has also strengthened gold.
Gold prices usually rise in the face of political troubles, inflation and economic uncertainties.
Meanwhile, Pakistan's credit rating is not expected to change in the light of the events in the country, Moody's Investors Service has said, if the country's economic policy framework does not change.
Moody's rates Pakistan 'B1' with a negative outlook, similar to the 'B+' rating with a negative outlook from Standard & Poor's. Both ratings are four notches below investment grade.
"As long as these unfolding political events do not have a direct negative impact on the policy framework or on external financial support, we don't think that the fundamental credit worthiness of Pakistan is affected at this stage," said Aninda Mitra, sovereign analyst at Moody's Investors Service in New York.
"This is not to say that the balance of risks to the (economic) policy framework are unlikely to change. They remain uncertain but that is captured by the negative outlook that we currently maintain on the 'B1' foreign currency bond ratings," Mitra said.
The country's economy has improved due to a strong privatisation effort, the opening to foreign direct investment and a better business environment.
