Gold Declines on Euro Zone Concerns

Gold futures ended lower on Monday as the political and economic situation in euro zone raised many questions among the investors. Gold futures contract for June delivery plunged 0.6 percent or $10.20 to settle at $1,632.20 per ounce on the Comex division of the New York Mercantile Exchange.

Investors were concerned ahead of the French Elections between Nicolas Sarkozy and Francois Hollande. Hollande claims that if he wins, he would consider implementing tougher budget rules for the single currency region. The news shook investors and lowered gold’s attraction against the greenback as a safe haven investment.

The dollar index also gained making the precious metal more expensive for investors holding foreign currencies. ICE dollar index DXY advanced to 79.626 on Monday as compared to 79.140 on Friday’s North American trading session.

Analyst Rohit Savant from CPM Group in New York commented, “When you see a sell-off like today, investors jump out of gold, it’s more a rush to cash” though a trickle of safe-haven flows could follow in the next couple of days.”

Among other base metals, copper futures contract for May delivery declined 2 percent or $0.07 to settle at $3.63 per pound while silver futures for the same month delivery fell 3.5 percent or $1.12 to $30.53 per ounce.

Platinum futures contract for July delivery plunged 1.8 percent or $27.90 to settle at $1,556.30 per ounce while palladium for June delivery slipped 0.9 percent or $6 to $670.90 per ounce.

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