Gold rebounds as US dollar pulls back
Gold managed to recoup some of its early losses today thanks to support from better than expected German economic sentiment data and positive results of today's auction of Spanish bonds.
The Centre for European Economic Research (ZEW) said today its German economic confidence index rose from minus-55.2 in November to minus-53.8 this month following nine straight months of declines.
Meanwhile, Spain raised €5 billion at today's auction of 12 and 18 month noted, while seeing its borrowing costs drop, which was interpreted as a sign that investors have regained confidence in Europe's ability to stem the debt crisis following Friday's summit.
Optimism that Europe is on course to cure its debt problems and avert a financial meltdown lifted the euro, while dampening demand for the safe-haven US dollar, which is seen as an alternative asset to gold.
Later in the session, gold faced pressure from a rebound in the US dollar. The greenback was supported by today's disappointing US retail sales figures, which boosted its safe haven appeal.
The Department of Commerce reported that sales rose just 0.2 percent in November following a gain of 0.6 percent in October, while expectations were for an increase of 0.5 percent.
Gold traded at US$1,664/oz this afternoon, up US$1.20 from Monday's close. Other precious metals were on the rise today with silver climbing 10 cents to US$31.39/oz, while platinum added US$5 to reach US$1,491/oz.
Today's top risers in the sector were:
Angel Mining (LON:ANGM), up 15.5 percent at 1.3 pence at midday
Mariana Resources (LON:MARL), up 9.5 percent at 10.56 pence
Archipelago Resources (LON:AR.), up 7.5 percent at 74 pence
Medusa Mining (LON:MML), up 6.5 percent at 340.5 pence
Greatland Gold (LON:GGP), up 5 percent at 0.97 pence
The top fallers were:
Central Rand Gold (LON:CRND), down 8.5 percent at 0.687 pence at midday
Minco (LON:MIO), down 8.5 percent at 2.75 pence
KEFI Minerals (LON:KEFI), down 7.5 percent at 3.81 pence
Caledonia Mining (LON:CMCL), down 7 percent at 6.5 pence
Peninsular Gold (LON:PGL), down 6 percent at 27 pence
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