Gold falls after French election result revives risk-on sentiment
Spot gold was down over 1% at $1,270.80 per ounce by 0618 GMT, after falling to a near two-week low of $1,265.90 earlier in the session.business Updated: Apr 24, 2017 14:48 IST
Gold fell more than 1% on Monday to its lowest in nearly two weeks after centrist candidate Emmanuel Macron won the first round of French presidential election, boosting stocks and sparking a sell-off in the safe-haven bullion.
Spot gold was down over 1% at $1,270.80 per ounce by 0618 GMT, after falling to a near two-week low of $1,265.90 earlier in the session.
U.S. gold futures were down 1.3% at $1,272.80 an ounce.
“Gold prices have fallen sharply this morning due to the improvement in risk sentiment,” said OCBC analyst Barnabas Gan.
“Macron and Marine Le Pen have emerged as the two key winners of the French elections. It does remove some of the suspense and risk-off sentiment we saw late last week.”
In France, Macron took a big step towards the presidency on Sunday by winning the first round of voting and qualifying for a May 7 runoff alongside far-right leader Marine Le Pen.
“With Macron showing good results, the safe-haven buying dried up pretty quickly and I think this is the reason behind gold selling off this morning,” said ANZ analyst Daniel Hynes.
The outcome lessens the risk of an anti-establishment shock on the scale of Britain’s vote to quit the European Union, with Macron widely tipped to win the final vote and keep France inthe union.
The euro on Monday briefly vaulted to five-month peaks on relief at the result, while U.S. stock index futures rose sharply on Sunday.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.52% to 858.69 tonnes on Friday.
Speculators increased their net long positions in COMEX gold for the fifth straight week to April 18, lifting it to a five-month high, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday.
Spot silver was down 0.6% at $17.77 an ounce, after earlier touching a one-month low of $17.65.
Platinum fell 0.4% to $966.40, while palladium was up 1% at $799.30.