Gold fell by more than 1 percent on Monday, marking its biggest tumble in over a month, after the market’s favored French presidential candidate won the first round of the country’s election, easing concerns about a potential political shock.
Centrist Emmanuel Macron took a big step toward the French presidency on Sunday by winning the first round of voting, with the latest opinion polls showing him as a strong favorite to beat far-right candidate Marine Le Pen in the final runoff.
The news represented a defeat for anti-EU forces on the right and left of French politics, sent European shares and the euro vaulting higher and sparked a sell-off in safe-haven bullion.
Spot gold was down 1.1 percent at $1,269.45 an ounce by 1359 GMT, having touched its lowest in nearly two weeks at $1,265.90. US gold futures were down 1.4 percent at $1,270.80.
“For the moment some of the tail risks in the form of a shock win by any of the other candidates has been averted. We see more downside in the very short term, leading up to the (French election) run-off in two weeks,” said Societe Generale analyst Robin Bhar.
He added, however, that a weaker dollar and simmering geopolitical tensions in North Korea and the Middle East were probably enough to keep gold underpinned at about $1,250.
The dollar recovered somewhat from its steep overnight falls but was still down 1.3 percent against the euro and 1 percent against a basket of currencies, supporting dollar-priced gold by making it cheaper for non-US investors.

Source: Arab News