Gold rallies after Greece cancels referendum
Gold rallied this afternoon, driven by a combination of the weakening US dollar and the European Central Bank's decision to reduce its interest rate by 25 basis points to 1.25 percent, which boosted the yellow metal's appeal as an inflation hedge.
The US dollar, which is seen as an alternative asset to gold, fell sharply against the euro after Greek Prime Minister George Papandreou scrapped plans to hold a referendum to approve the latest bailout package agreed on by the EU.
Earlier in the day, it was reported that Papandreou would offer his resignation after the referendum faced opposition within the government.
The shock decision to ask Greek voters whether the country should accept more financial aid and impose another round of unpopular austerity measures that was announced earlier this week triggered a sell-off in the markets.
Traders feared that the bailout would be rejected, leading to the failure of Europe's anti-crisis plan that was unveiled in Brussels last week following prolonged negotiations between EU leaders.
Gold traded at US$1,759/oz this afternoon, up US$22 from Wednesday's close. Silver was flat at US$34.27/oz and platinum rallied US$32 to US$1,633/oz.
Today's top risers in the sector were:
Caledonia Mining (LON:CMCL), up 9.5 percent at 5.75 pence at midday
Kryso Resources (LON:KYS), up 7 percent at 29.88 pence
Condor Resources (LON:CNR), up 5 percent at 7.5 pence
Kirkland Lake Gold (LON:KGI), up 4.5 percent at 1,184 pence
Fresnillo (LON:FRES), up 3.5 percent at 1,848 pence
The top fallers were:
Solomon Gold (LON:SOLG), down 15 percent at 13 pence at midday
Hambledon Mining (LON:HMB), down 11 percent at 3.44 pence
Angel Mining (LON:ANGM), down 5.5 percent 1.21 pence
Ariana Resources (LON:AAU), down 5 percent at 4.86 pence
Alecto Minerals (LON:ALO), down 5 percent at 1.9 pence
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