Tags: gold | France | election | risk

Gold Drops More Than 1 Percent After French Election Revives Risk Appetite

Gold Drops More Than 1 Percent After French Election Revives Risk Appetite

Monday, 24 April 2017 06:38 AM

Gold fell more than 1 percent on Monday, the biggest decline in more than a month, after the market's favored candidate won the first round of the French election, easing worries over a political shock in the second round.

Centrist Emmanuel Macron took a big step towards the French presidency on Sunday by winning the first round of voting, with the latest opinion polls showing him as strong favorite to beat far-right candidate Marine Le Pen in the final vote.

The news represented a huge defeat for anti-European Union forces on the right and left of French politics. It also sent European shares vaulting higher, boosted the euro by as much as 2 percent at one point and sparked a sell-off in safe-haven bullion. Spot gold was down 1 percent at $1,271 an ounce by 1008 GMT, having touched its lowest in nearly two weeks at $1,265.81. U.S. gold futures were down 1.3 percent at $1,272.40.

"For the moment some of the tail risk in the form of a shock win by any of the other candidates has been averted. We see more downside in the very short term, leading up to the (French election) run-off in two weeks," said Societe Generale analyst Robin Bhar.

He added, however, that a weaker dollar and simmering geopolitical tensions in North Korea and the Middle East were probably enough to keep gold underpinned at about $1,250. The dollar recovered somewhat from its steep overnight falls but was still down 1.3 percent against the euro and 1 percent against a basket of currencies, supporting dollar-priced gold by making it cheaper for non-U.S. investors.

In the wider markets, the pan-European STOXX 50 index rose 3 percent and France's CAC40 jumped almost 4 percent. The market's so-called fear gauge, the VIX volatility index , plunged by its most since November.

Weeks of escalating geopolitical tensions had prompted speculators to increase their net long, or buy, positions in COMEX gold to a five month high in the week to April 18, official data showed on Friday.

"Those speculative financial investors who had previously still been betting heavily on rising gold prices are likely to have covered many of their positions in response to the (French) election result," Commerzbank said in a note.

Spot silver was down 0.6 percent at $17.78 an ounce after touching a one-month low of $17.65. Platinum fell 0.4 percent to $966.50, while palladium was up 1.1 percent at $800.50.

© 2019 Thomson/Reuters. All rights reserved.

   
1Like our page
2Share
StreetTalk
Gold fell more than 1 percent on Monday, the biggest decline in more than a month, after the market's favored candidate won the first round of the French election, easing worries over a political shock in the second round.Centrist Emmanuel Macron took a big step towards the...
gold, France, election, risk
406
2017-38-24
Monday, 24 April 2017 06:38 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved