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Gold futures fall on diminished Euro worries

Xinhua, April 24, 2017 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Monday as worries decreased over the expected French election.

The most active gold contract for July delivery fell 11.6 U.S. dollars, or 0.90 percent, to settle at 1,277.50 dollars per ounce.

The first round of French election on Sunday resulted in the choices of Marine Le Pen and Emmanuel Macron, with Macron reaching 24 percent compared to Le Pen's 21.3 percent of the vote, according to data company Kantar Sofres.

Investors are also cautiously weighing the potential for the election of Le Pen in the runoff on May 7. Le Pen is generally seen by the markets as a potentially destabilizing factor as she has promised to hold a referendum on French participation in the European Union, which has led some investors to fear a repeat of Brexit.

Investors currently believe that Le Pen is unlikely to win the final election. This had originally made investors nervous and triggered a move to gold as a safe haven, but now Le Pen's win in the runoff is seen unlikely, drawing investors back into interest-bearing assets, putting pressure on the precious metal.

Gold was put under further pressure as the U.S. Dollar Index rose by 0.2 percent to 99.17 as of 1823 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

An additional factor in the decrease of the price of gold was the U.S. Dow Jones Industrial Average rising by 233 points, or 1.14 percent as of 1822 GMT. Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven, while the opposite is true when U.S. equities post gains.

Silver for May delivery added 0.2 cents, or 0.01 percent, to close at 17.858 U.S. dollars per ounce. Platinum for July delivery dropped 17.4 U.S. dollars, or 1.78 percent, to close at 960.20 U.S. dollars per ounce. Endit