Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slid 0.6% and the dollar gained as the outcome of Saturday's presidential election in France added to recovery concerns in the eurozone. Risk assets plummeted across the board with the global Dow dropping 1.5% as investors turned to cash. Manufacturing shrank in China for the sixth straight month, adding to risk-off sentiment. Silver led the retreat in precious metals by dropping 3.5%, reaching its lowest close since mid-January.

At the close: June gold lost $10.20 to $1,632.60; May silver dropped $1.12 to $30.53; July platinum slid $27.90 to $1,556.30; June palladium fell $6 to $670.90 an ounce.

Incumbent Nicholas Sarkozy's loss to Socialist challenger Fran�ois Hollande in the first round of France's presidential election is widely seen as a part of a larger backlash against austerity measures taken to contain the eurozone debt crisis. With a combined debt of $11 trillion in 2011, EU nations agreed to a Germany-led pact requiring huge and deeply unpopular budget cuts, especially in the most beleaguered nations like in Greece, Spain, Portugal, Ireland, and Italy, in exchange for the creation of bailout mechanisms. Riding a grassroots rejection of this strategy, Hollande promised to renegotiate the pact, forged by Sarkozy and Germany's Angela Merkel, and push for more stimulus. In addition, the government of Netherlands Prime Minister Mark Rutte resigned following the collapse of budget talks over the weekend. Rutte was another ally of the Merkel austerity program. Concerned over political instability in the fragile eurozone and uncertain about what it means for containing the debt crisis, nervous investors therefore rushed into U.S. dollars and Treasury bonds, just as they did when Greece was on the brink of default. A rising dollar weighs on gold because it is denominated in dollars internationally.