Gold slips below $1,800 as safe haven demand erodes
Yesterday's reassuring statements from European politicians and today's decision by the European Central Bank (ECB) to provide short term loans in US dollars to euro zone banks increased appetite for riskier assets, while safe haven plays such as gold were out of favour.
German Chancellor Angela Merkel and her French counterpart Nicolas Sarkozy said that Europe is committed to keeping Greece in the euro zone and go as far as needed to ensure it doesn't go into a default.
Olli Rehn provided more comfort to the markets today. The EU Economic Affairs Commissioner said he does not expect Europe to go into a recession. However, Rehn also said that economic growth in Europe is likely to stall.
Support from a decline in the US dollar, which is seen as an alternative asset to gold, did not provide enough support for the yellow metal to stay above the key US$1,800 per ounce level.
Gold traded at US$1,778/oz, down US$43 from Wednesday's close. Silver fell US$1.07 to US$39.68/oz and platinum dropped US$34 to US$1,779/oz.
Today's top risers in the sector were:
ECR Minerals (LON:ECR), up 8.5 percent at 1.44 pence at midday
Caledonia Mining (LON:CMCL), up 8 percent at 6.75 pence
Chaarat Gold (LON:CGH), up 7 percent at 28.05 pence
Aquarius Platinum (LON:AQP), up 3.5 percent at 223 pence
Patagonia Gold (LON:PGD), up 3.5 percent at 67.25 pence
The top fallers were:
Orsu Metals (LON:OSU), down 9.5 percent at 9.86 pence at midday
Oxus Gold (LON:OXS), down 6 percent at 0.8 pence
Greatland Gold (LON:GGP), down 5 percent at 1.57 pence
Kolar Gold (LON:KGLD), down 4 percent at 23 pence
GMA Resources (LON:GMA), down 3.5 percent at 0.435 pence
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