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Gold tumbles most in more than seven weeks after French election
[MELBOURNE] Gold slumped the most in more than seven weeks as investors returned to riskier assets on speculation pro-growth centrist Emmanuel Macron will become France's next president after the first round of voting.
Bullion for immediate delivery tumbled as much as 1.5 per cent, the biggest decline since March 2, to US$1,265.51 an ounce, and traded at US$1,271.25 at 7:08am in Singapore, according to Bloomberg generic pricing. The commodity dropped as the euro surged, hurting the US dollar.
Gold trimmed this year's gain to 11 per cent after Mr Macron and far-right nationalist Marine Le Pen won the first round of the French presidential election, triggering a runoff on May 7.
The place for Mr Macron in the second round avoids the scenario of a contest between the anti-euro Ms Le Pen and the Communist-backed Jean-Luc Melenchon, curbing risk for the euro zone after a year of polling upsets and political turmoil around the world.
Mr Macron, a first-time candidate and political independent, was on course to take 23.8 per cent in Sunday's election, with National Front leader Ms Le Pen on 21.7 per cent, according to projections from the Interior Ministry. A snap poll released late Sunday suggested Mr Macron would defeat Ms Le Pen by more than 20 percentage points in the second round.
"It appears markets were pricing in the worst case scenario in the French elections," Daniel Hynes, Sydney-based senior commodity strategist at Australia & New Zealand Banking Group Ltd, said in an email.
"So with Macron strengthening his position, the markets are comfortable to push back into risky asset classes. This should see safe-haven buying drying up a little bit in the gold market."