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The price of gold has become one of the dominant themes in global markets over the past couple of years as the financial crisis unravelled. The Gold wrap reports on the latest trends in the price of the precious metal as well as factors influencing the demand for the safe haven asset.
Gold rises as French bond sale results support euroJanuary 16 2012, 4:22pm
Gold rose today after the results of today’s French debt sale met expectations with the euro zone’s second largest economy raising €8.7 billion, while seeing yields on its two year bonds drop from 0.71 percent to 0.66 percent.
Demand for French notes was boosted by reassuring comments from Moody’s, which reiterated its AAA rating with a stable outlook for France. The comments from Moody’s followed Friday’s downgrade of France and eight other euro zone members by fellow rating agency Standard & poor’s.
Confidence in euro zone debt will be put to a test again tomorrow with the European Financial Stability Facility (EFSF) set to auction off €1.5 billion worth of bills.
The outcome of the auction along with the upbeat comments from Moody’s lifted demand for riskier assets, sending European equities and commodities higher, while curbing demand for safe haven assets such as the US dollar.
The American currency is seen as an alternative investment to gold and usually moves inversely to the yellow metal.
Gold traded at US$1,642/oz, up US$3 from Friday’s close. Other precious metals moved in the same direction as gold with silver rising 18 cents to US$29.95/oz and platinum advancing US$7 to US$1,494/oz.
Today’s top risers in the sector were:
Jubilee Platinum (LON:JBL), up 32 percent at 16.2 pence at midday
Minco (LON:MIO), up 9.5 percent at 2.88 pence
Orsu Metals (LON:OSU), up 8.5 percent at 9.75 pence
Caledonia Mining (LON:CMCL), up 7.5 percent at 7 pence
GGG Resources (LON:GGG), up 6 percent at 11.65 pence
The top fallers were:
Alecto Minerals (LON:ALO), down 14.5 percent at 1.5 pence at midday
KEFI Minerals (LON:KEFI), down 8.5 percent at 3.22 pence
ECR Minerals (LON:ECR), down 8.5 percent at 1.03 pence
Metals Exploration (LON:MTL), down 6 percent at 11.5 pence
Angel Mining (LON:ANGM), down 6 percent at 2.56 pence
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