Gold prices rose today, driven by optimism ahead of tomorrow’s vote on the constitutionality of Germany’s participation in the European Stability Mechanism (ESM) bailout fund by the country’s highest court.
The euro surged against the US dollar today after it was confirmed that the German Constitutional Court will announce its verdict tomorrow after an attempt to delay its ruling by MP Peter Gauweiler failed.
Gold is seen as an alternative investment to the US dollar and tends to move inversely to the greenback.
Additionally, gold was supported by expectations of further stimulus from the Federal Reserve, which could be announced this Thursday.
According to UBS, the Fed may announce a six month quantitative easing programme of up to US$500 billion.
More stimulus from the fed would weaken the US dollar and boost gold’s appeal as an inflation hedge.
Gold traded at US$1,736/oz this afternoon, up US$12 from Monday’s close. Silver rallied 43 cents to US$33.77/oz and platinum tacked on US$16 to reach US$1,606/oz.
Today’s top risers in the sector were:
SolGold (LON:SOLG), up 18 percent at 4.14 pence at midday
Central Rand Gold (LON:CRND), up 9 percent at 0.769 pence
Aureus Mining (LON:AUE), up 5.5 percent at 64.85 pence
Ortac Resources (LON:OTC), up 4 percent at 0.6 pence
Archipelago Resources (LON:AR.), up 3.5 percent at 56.95 pence
The top fallers were:
Mariana Resources (LON:MARL), down 8 percent at 4.93 pence at midday
Medusa Mining (LON:MML), down 5.5 percent at 358.09 pence
ECR Minerals (LON:ECR), down 5.5 percent at 0.514 pence
Vatukoula Gold Mines (LON:VGM), down 5 percent at 46.5 pence
