Gold dropped over 1 percent on Monday after centrist Emmanuel Macron won the first round of the French presidential elections on Sunday, easing concerns about a Brexit-like shock.
The latest opinion shows that Macron has taken the lead against far-right candidate Marine Le Pen, who wants to take France out of the euro and cut immigration. A second round will take place on May 7th.
Gold Spot dropped as much as 0.93 percent to $1,272.49 per ounce at 11:02 AM EDT. Gold future for June Delivery also fell 1.20 percent to 1,273.60 per ounce.
"For the moment some of the tail risk in the form of a shock win by any of the other candidates has been averted. We see more downside in the very short term, leading up to the (French election) run-off in two weeks," said Societe Generale analyst Robin Bhar.
Gold has hit its highest level in five months last week due to growing tensions between the United States and North Korea. Gold is often considered as safe-haven assets in times of geopolitical and financial turmoil. Despite its decline on Monday, gold still gain 11 percent this year.
“Gold has benefited from geopolitical tensions this year and the market was pricing in a nasty surprise in France,” said Bernard Dahdah, an analyst at Natixis SA in London. “That has subsided with the fact that there won’t be two extreme candidates in the second round.”