Gold prices rallied on Tuesday, bouncing back from a steep plunge on Friday as global stock markets, bond prices, base metals, and the Euro currency faced pressure following French President Emmanuel Macron’s decision to call a snap election. The risk of far-right leadership in France’s parliament has raised concerns about the country’s fiscal situation, impacting the Euro’s stability.

With the US Federal Reserve expected to maintain interest rates and the European Central Bank cutting rates, market analysts predict a prolonged period of Euro weakness. Gold prices in Euros climbed to €2158 per Troy ounce, recovering half of the previous drop after China’s announcement of not buying gold bullion in May.

Meanwhile, the US Dollar gold price surged to $2315, partially reversing its decline before the weekend. In contrast, the gold price in UK Pounds per ounce showed modest recovery at £1816, up by only 1.0% from a recent low.

Following the European Parliament elections that saw significant gains for ‘far-right’ parties, bond prices in major Western countries declined, leading to increased borrowing costs for governments in the Eurozone. While Germany’s 10-year Bund yield retreated from recent highs, France’s 10-year OATS rate surged to levels not seen since November.

The market volatility underscores the impact of political developments on financial markets, with investors closely monitoring the evolving situation in France and its implications for the Euro and global economy.