Gold prices fell today as a sell-off in global equity markets boosted demand for the safe-haven US dollar, which has an inverse relationship with the yellow metal.
The Spanish government today reduced its growth forecasts for the next two years. The GDP is now expected to contract 0.5 percent next year compared with the previous projection of a 0.2 percent increase, while the growth forecast for 2014 was cut to 1.2 from 1.4 percent previously.
Spain saw its borrowing costs soar on the news. Yields on its benchmark 10 year bonds rose further above the seven percent level, which is considered unsustainable, soaring 0.25 to 7.26 percent.
In the meantime, Spain today approved a €100 billion aid package for its ailing banking sector, which was granted by the EU earlier this year.
Gold traded at US$1,579/oz, down US$2 from Thursday’s close. Other precious metals moved in the same direction as gold with silver falling six cents to US$27.22/oz and platinum dropping US$10 to US$1,404/oz.
Today’s top risers in the sector were:
Angel Mining (LON:ANGM), up 6 percent at 1.04 pence at midday
Kryso Resources (LON:KYS), up 5 percent at 35.05 pence
Condor Gold (LON:CNR), up 3.5 percent at 108.7 pence
Centamin (LON:CEY), up 1 percent at 67.2 pence
The top fallers in the sector were:
ECR Minerals (LON:ECR), down 10 percent at 0.58 pence
Arian Silver (LON:AGQ), down 7 percent at 11.03 pence
Petropavlovsk (LON:POG), down 4 percent at 399.8 pence