Gold fell sharply today as the US dollar rallied on the back of yesterday’s update on the US balance of trade. The data showed that the trade gap narrowed to US$43.68 billion as US exports surged to record highs.
Meanwhile, China’s trade surplus grew less than expected in May, reaching US$13.05 billion compared to US$11.4 billion in April, giving more support to the American currency.
The EUR/USD fell more than 1 percent today, while gold, which has an inverse relationship with the US dollar, shed over US$10 per ounce.
Safe haven demand remained strong after yesterday’s US employment data disappointed, revealing that initial jobless claims rose 1,000 to 427,000 last week, while analysts were expected to see a decline.
in addition to that, fears over the Greek debt crisis intensified after the German government refused to back down from its demand that private investors be involved in a new financial aid package for the debt laden country.
Gold last traded at US$1,531/oz. Silver and platinum slipped to US$36.52/oz and US$1,824/oz respectively.
Most mining stocks were in decline today. Fresnillo (LON:FRES) dropped 1.2 percent and Lonmin (LON:LMI) declined marginally. Another FTSE 100 constituent Randgold Resources (LON:RRS) tacked on almost 1 percent.
In the FTSE 250, Petropavlovsk (LON:POG) and Aquarius Platinum (LON:AQP) dropped 1.2 percent and percent.
African Barrick Gold (LON:ABG) dipped 1.7 percent.
Frontier Mining (LON:FML) tacked on more than 5 percent.