Gold shed more than US$10 per ounce today as political uncertainty in the euro zone boosted the safe haven appeal of the US dollar, an alternative asset to the yellow metal.
French President Nicolas Sarkozy lost the first round of the French presidential election to Socialist Francois Hollande yesterday.
Hollande, who is widely expected to win the May 6 runoff, has previously said he will renegotiate the euro zone fiscal compact if he is elected.
In the Netherlands, the government resigned today after the People’s Party for Freedom and Democracy and the Freedom Party, which made up the ruling coalition, failed to agree on a new round of spending cuts.
Traders are now looking to the next policy meeting of the Federal Reserve, which will take place on Wednesday, to see how the US central bank responds to the recent lacklustre jobs data.
Early this month, the Department of Labor reported that the US economy created only 120,000 jobs last month, while expectations were for a gain of over 200,000.
Despite the weak jobs figures, it is not expected to the Fed will announce any additional stimulus on Wednesday.
Gold traded at US$1,631/oz this afternoon, down US$11 from Friday’s close. Silver slipped US$1.03 to US$30.67/oz and platinum fell US$24 to US$1,553/oz.
Today’s top risers in the sector were:
Kryso Resources (LON:KYS), up 5 percent at 29.2 pence at midday
Serabi Gold (LON:SRB), up 3 percent at 11.95 pence
Aureus Mining (LON:AUE), up 1 percent at 64.2 pence
The top fallers were:
Peninsular Gold (LON:PGL), down 8.5 percent at 18.5 pence at midday
Patagonia Gold (LON:PGD), down 8 percent at 33.96 pence
Oxus Gold (LON:OXS), down 5.5 percent at 2.9 pence
Hambledon Mining (LON:HMB), down 5.5 percent at 1.78 pence
