Gold prices rise after Macron’s win

Gold prices rose on Monday on bargain-hunting after falling to a seven-week low earlier when safe-haven demand ebbed away following pro-EU candidate Emmanuel Macron’s victory in the French presidential election.
Spot gold rose 0.4 percent to $1,232.61 per ounce by 1211 GMT, after touching 1,224.86 earlier in the session, its lowest level since March 17. The precious metal, seen as a safe haven, fell 3.2 percent last week, its biggest percentage fall in 25 weeks as polls indicated a landslide for Macron.
US gold futures rose 0.5 percent to $1,233 an ounce. “The result of (the French) election was pretty well forecast ... Last week, we had some sizeable (long) liquidation in gold and physical demand remains pretty good right now ... I am not surprised to see gold supported around current levels,” ICBC Standard Bank analyst Tom Kendall said.
The removal of the political risk associated with Macron’s rival Marine Le Pen — who had vowed to take France out of the EU — leaves investors refocusing on the pace of monetary policy normalization in Europe and the US.
The European Central Bank (ECB) is expected to have more room to tighten policy as the euro zone’s economic recovery gathers pace.
In the US, data out Friday showed job growth rebounded sharply in April and the unemployment rate dropped to near a 10-year low, which is seen as reinforcing the case for a US interest rate hike next month. Higher rates dent demand for non-interest bearing gold. At the same time, a stronger dollar makes dollar-priced gold costlier for non-US investors.
“Expectation for a hike is there so it is about the tone the Federal Reserve (takes). I am mildly bearish for the remainder of this quarter, I would not be surprised to see (gold) test $1,200-$1,180,” Kendall said. Gold has fallen more than 5 percent since hitting a five-month high of $1,295.42 in mid-April.

Source: Arab News