Gold rises, euro strengthens after Macron wins in France
The Dollar Business Bureau
After dropping to a 7-week low previously in the trading session, gold moved up marginally on Monday on bargain-hunting and the euro strengthened against the dollar after Emmanuel Macron won France’s presidential election.
Spot gold increased 0.3% to $1,230.88 an ounce at 0401 GMT, after reaching $1,224.86 per ounce earlier in the trading session, the lowest since March 17.
Gold futures at US exchanges also rose 0.3% at $1,230.60 per ounce.
On Monday, the euro touched a high of six months against dollar after Macron, a pro-European Union candidate, won the presidential election in France, defeating the far-right nationalist, Marine Le Pen, who threatened to pull out the country from the EU.
“Leading into the election, with many polls predicting Macron's victory, we saw safe-haven buying easing into end of last week. Confirmation that he being victorious has not resulted in any additional selling,” said Daniel Hynes, an analyst at ANZ.
However, uncertainties on whether the new party of Emmanuel Macron could get a majority in the legislative elections in June and no clarity on Macron’s ability to deliver on policies gave a marginal push to the gold prices.
Last week, gold witnessed its biggest fall in weekly percentage since end of the week on November 11, finishing over 3% lower.
Meanwhile, the job growth in US recovered sharply in the month of April and the rate of unemployment declined to 4.4%, close to a 10-year low, indicating a tightening labour market which is expected to confirm the case for an increase in interest rate next month in spite of a modest wage growth.
Higher interest rates can have an impact on the demand of non-interest bearing gold.