Gold fell sharply today after the European Central bank (ECB) reduced its interest rates by 25 basis points to 0.75 percent to shore up the European economy. Traders started selling the yellow metal to take profits after the announcement as the move was widely expected and had already been priced in. Early in the day, gold topped US$1,620 per ounce after China surprisingly reduced its lending rates, boosting the metal’s appeal as an inflation hedge. In addition to profit taking, gold was pressured by a surge in the US dollar, which has an inverse relationship with gold. Demand for the American currency was boosted by today’s jobless claims data, which revealed a larger than expected drop in claims for unemployment benefits. Jobless claims dropped 14,000 to 374,000 last week, while a Bloomberg survey projected 385,000 claims. Positive US data tends to support the US dollar as it reduces the likelihood of further stimulus action by the Federal Reserve. Traders are now looking to tomorrow’s key non-farm payrolls data for June. Gold traded at US$1,609/oz, down US$7 from Wednesday’s close. Silver dropped 43 cents to US$27.86/oz and platinum slumped US$16 to US$1,469/oz. Today’s top risers in the sector were: Vatukoula Gold Mines (LON:VGM), up 10 percent at 36.1 pence at midday Orosur Mining (LON:OMI), up 8 percent at 40 pence Yamana Gold (LON:YAU), up 3 percent at 1,085 pence Stratex International (LON:STI), up 3.5 percent at 5.5 pence The top fallers were: Kefi Minerals (LON:KEFI), down 8.5 percent at 2.3 pence at midday Mariana Resources (LON:MARL), down 6 percent at 5.05 pence Arian Silver (LON:AGQ), down 5.5 percent at 15.05 pence ECR Minerals (LON:ECR), down 5.5 percent at 0.353 pence SolGold (LON:SOLG), down 5.5 percent at 4.47 pence

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