Gold rallies after European data tops expectations
Gold prices were on the rise today, driven by the combination of a weaker US dollar and strong demand from bargain hunters, which bought into the cheap price after the yellow metal fell below US$1,600 per ounce.
The US dollar, which is seen as an alternative investment to gold, fell today as demand for safe haven assets faded following the Spanish debt auction. The euro zone's fourth largest economy sold €5.6 billion worth of short term bonds, topping its initial target of €4.5 billion.
In addition, Spain's borrowing costs fell dramatically with yields on its six month noted slumping from 5.227 percent a month ago to 2.435 percent.
More positive news came from Germany, where the Ifo business confidence index surged for the second month in a row in December, rising from 106.6 in the previous month to 107.2.
The surge in oil prices, which added more than US$2 per barrel today, also was positive for gold, boosting its appeal as an inflation hedge.
Gold traded at US$1,613/oz, up US$20 from Monday's close. Silver rallied 66 cents to US$29.46/oz and platinum added US$17 to reach US$1,425/oz.
Today's top risers in the sector were:
Central Rand Gold (LON:CRND), up 9.5 percent at 0.76 pence at midday
Highland Gold (LON:HGM), up 3.5 percent at 187 pence
Patagonia Gold (LON:PGD), up 3.5 percent at 46.5 pence
Shanta Gold (LON:SHG), up 3 percent at 20.62 pence
The top fallers were:
Alecto Minerals (LON:ALO), down 13 percent at 1.52 pence at midday
Orsu Metals (LON:OSU), down 9.5 percent at 7.01 pence
African Consolidated Resources (LON:AFCR), down 8.5 percent at 2.41 pence
Bezant Resources (LON:BZT), down 8 percent at 24.79 pence
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