Gold prices fall on profit taking
Gold dropped this afternoon as traders dumped the yellow metal to take profits after the prices added more than US$60 per ounce last week, driven by a decline in the US dollar.
As the American currency is seen as an alternative asset to gold, a weaker greenback usually props up demand for gold.
Gold was also pressured by reports that demand for the yellow metal from the world's largest gold consumer India has fallen over the recent weeks due to sky high prices despite the ongoing wedding season, which began in October.
Investment bank Macquarie has recently estimated that Indians currently own gold worth US$950 billion.
The price of gold received some support from a further decline in the US dollar, which fell against the euro today on optimism that Europe is inching closer to resolving its debt problems.
German Chancellor Angela Merkel and her French counterpart Nicolas Sarkozy held talk in Paris today, resulting in an agreement to propose changes to the EU treaty to tighten fiscal discipline within the euro zone.
The proposals include automatic sanctions for government that fail to keep its deficit within a certain limit.
Gold traded at US$1,739/oz, down US$6 from Friday's close. Other precious metals were headed in different directions as while silver rallied 30 cents to US$32.94/oz, platinum declined US$6 to US$1,537/oz.
Today's top risers in the sector were:
Triple Plate Junction (LON:TPJ), up 10.5 percent at 5.25 pence at midday
Mariana Resources (LON:MARL), up 9.5 percent at 11.2 pence
Orosur Mining (LON:OSU), up 6.5 percent at 72.5 pence
Archipelago Resources (LON:AR.), up 4 percent at 70 pence
Kirkland Gold (LON:KGI), up 3.5 percent at 1,160 pence
The top fallers were:
Solomon Gold (LON:SOLG), down 11 percent at 10 pence at midday
Caledonia Mining (LON:CMCL), down 5.5 percent at 6.75 pence
Stratex International (LON:STI), down 5.5 percent at 6.75 pence
Landore Resources (LON:LND), down 3.5 percent at 9.75 pence
Shanta Gold (LON:SHG), down 3 percent at 21.58 pence
Related news
- London Mining remains on track to hit 2012 production target at Marampa
- Ceres Power Holdings reports significant improvements of its fuel cell products
- Oxford Catalysts Group shares advance as it announces first start-up of FT reactor
- Mariana Resources kicks off drilling programme at Las Calandrias gold-silver project
- Orogen Gold begins Phase 1 drilling programme at Deli Jovan
- Magnolia Petroleum on track to hit 100 wells target by end-2012
- Mwana Africa sells 15pct stake in Freda Rebecca gold mine for $405k - UPDATE
