Gold price bounces off lows hit after Macron's French election win

London (May 8)  Gold prices rose on Monday on bargain-hunting having dipped to a seven-week low earlier as safe-haven demand ebbed away after Emmanuel Macron won the French presidential election, with a similar trend seen in other markets.           

Spot gold rose 0.5 percent to $1,233.33 per ounce by 1004 GMT, after touching 1,224.86 earlier in the session, its lowest level since March 17. The precious metal, seen as a safe haven, fell 3.2 percent last week, its biggest percentage fall in 25 weeks as polls indicated a landslide for Macron.

U.S. gold futures rose 0.6 percent to $1,234 an ounce.
    "The result of (the French) election was pretty well
forecast ... Last week we had some sizeable (long) liquidation
in gold and physical demand remains pretty good right now ...
I'm not surprised to see gold supported around current levels,"
said ICBC Standard Bank analyst Tom Kendall.
    The removal of the political risk associated with Macron's
rival Marine Le Pen - who had vowed to take France out of the
euro - leaves investors refocusing on the pace of monetary
policy normalisation in Europe and the United States.
    The European Central Bank is expected to have more room to
tighten policy as the euro zone's economic recovery gathers
pace.
    In the United States data out Friday showed job growth
rebounded sharply in April and the unemployment rate dropped to
4.4 percent, near a 10-year low, which is seen as reinforcing
the case for a U.S. interest rate increase next month.
           
    Higher rates dent demand for non-interest bearing gold. A
stronger dollar also makes dollar-priced gold costlier for
non-U.S. investors.
    "Expectation for a hike is there so its about the tone the
Federal Reserve (takes). I'm mildly bearish for the remainder of
this quarter, I wouldn't be surprised to see (gold) test
$1,200-$1,180," said Kendall.    
    Gold has fallen more than 5 percent since hitting a
five-month high of $1,295.42 in mid-April.
    Hedge funds and other money managers cut their net-long
position in COMEX gold for the first time in seven weeks, in the
week to May 2, while they reduced their bullish stance in silver
to the lowest since January, U.S. government data showed on
Friday.            
    Spot silver        rose 0.4 percent to $16.35 an ounce.
    Platinum        was 0.9 percent higher at $918.15 an ounce,
and palladium        was 0.5 percent higher at $817.90.

Source: Reuters