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(ShareCast News) - Miners were at the bottom of the pile as risk appetite seeped back into the market following a deal in Italy to avoid a 'bank run' against two of the country's lenders, according to analysts.
That may have undermined the price of gold, with gold futures for August delivery on Comex giving back 0.86% to trade at $1,245.70/oz. as of 1616 BST.
However, it was a bit of strange day in commodity markets with the sharp drop in gold futures early in the London session also being attributed by some to a so-called 'fat finger'. For other market observers the abrupt move was simply to do with light trading volumes.
In just one minute at 0900 BST trade in the New York futures of the yellow metal spiked to 1.8m ounces.
A total of 18,149 lots changed hands during those sixty seconds, versus 2,334 lots one hour afterwards.
"The improved sentiment in the market is weighing on safe haven assets, particularly Gold which is down more than 1% on the day. Gold recovered back towards $1,260 towards the end of last week but has been sold heavily this morning, hitting its lowest level since the middle of May at one point.
"A sustained break below $1,240 could trigger a move back towards $1,220, which has been a very notable level on numerous occasions this year," said Craig Erlam, senior market analyst at Oanda.
David Madden at CMC Markets UK was of a similar view, pointing out to clients gold's 200-day moving average which was then to be found at $1,237/oz..
For both analysts, the deal reached in Italy at the weekend to wind-down two ailing banks in the northern Veneto region was the main trigger behind risk appetite.
Shares of those companies most exposed to strengh in Sterling were also off in the wake of the agreement reached between the Conservatives and Northern Ireland's DUP put a slight bid into the pound, weighing in Forestry and Aerospace & Defence issues, both of which make a large amount of their revenues overseas.
Top performing sectors so far today
Industrial Metals & Mining 2,290.45 +2.26%
Life Insurance 8,610.21 +1.34%
Banks 4,303.47 +1.26%
Personal Goods 37,658.49 +1.21%
Food Producers & Processors 8,605.78 +1.15%
Bottom performing sectors so far today
Forestry & Paper 22,027.43 -0.63%
Aerospace and Defence 5,455.14 -0.24%
Food & Drug Retailers 2,830.61 -0.06%
General Industrials 6,013.88 -0.01%
Alternative Energy 0.00 0.00%
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