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Randgold Resources, Fresnillo, Lonmin and Petropavlovsk slip and gold, silver and platinum decline

Published: 15:42 20 May 2010 BST

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Gold rebounded from two week lows after a rally in stock markets was reversed, turning into yet another selloff to send the main indexes in Europe and the US south. The markets were impacted by Germany’s decision to ban a practice known as naked short selling to raise concerns about the move’s impact on the liquidity in bond markets.

Adding to that were lingering jitters over Greece’s debt situation and that the fiscal crisis could spread into other euro zone countries.

Gold is increasingly seen as a hedge against risks associated with currency and equity markets. The yellow metal used to serve as an investment alternative to the US dollar and usually moved inversely to the American currency and in tandem with the euro.

Gold prices were negatively impacted by weak demand from India, which is the world’s largest consumer of gold.

Gold returned to US$1,190/oz, while silver and platinum dropped to US$17.71/oz and US$1,517/oz respectively.

Major miners fell today. Randgold Resources (LSE: RRS) lost 1.7%, while fellow blue chips silver miner Fresnillo (LSE: FRES) and platinum producer Lonmin (LSE: LMI) both shed slightly more than 4%.

Specialty chemicals firm Johnson Matthey (LSE: JMAT) was down 3.4%.

Aquarius Platinum (LSE: AQP) tumbled 11.3%. Silver producer Hochschild Mining (LSE: HOC) and gold miner Petropavlovsk (LSE: POG) dropped 4%.

Turkey focused gold miner Ariana Resources (AIM: AAU) went against the tide, rising 5%.

Africa focused gold deposit developer Cluff Gold (AIM: CLF) slipped into the red with a 9% loss. Western Australia operating Norseman Gold (AIM: NGL) and Philippines focused gold producer Medusa Mining (AIM&ASX: MML) declined 8%. Canada based junior gold developer Rambler Metals and Mining Plc (AIM: RMM), copper and gold miner EMED Mining (AIM: EMED) and London listed Australian gold producer Leyshon Resources (AIM: LRL) dropped 7%, 6.5% and 6% respectively.

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