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Randgold and African Barrick miss out on FTSE rally as gold price drops

With risk seemingly back on the agenda, the gold safe haven has lost some of its glister.

The precious metal is currently down nearly an ounce at 43, and the recently strong gold mining companies have dipped back as a result.

Randgold Resources is the biggest faller in a fairly upbeat FTSE 100, down 100p at £68.40 although it should be pointed out the group has climbed from £55.35 since the start of August.

Leading the mid-cap fallers is African Barrick Gold, down 17.5p at 586p. The miner, which has four gold mines in Tanzania, said it planned to list on the country’s exchange by the end of the year. This is later than the initial plan of making the move by the end of this month. It also said it was planning to double output to 2m ounces by 2024 from an expected 1m ounces in 2014. It produced 700,000 ounces last year.

Elsewhere among the fallers Imperial Tobacco is 9p lower at £20.96 after Goldman Sachs removed the cigarette maker from its pan-European buy list and cut its target price from £24 to £21.90.

Diageo has dipped 6p to £12.14 as the drinks group’s shares went ex-dividend.

Overall though the FTSE 100 has jumped 115.04 points to 5671.88, helped by news that a German court rejected lawsuits attempting to block its participation in the Eurozone bailouts. Joshua Raymond, chief market strategist at City Index, said:

A late rally in US markets last night and a positive session in Asia trading this morning has helped to convince bargain hunters to make their move in Europe today, helping to lift the FTSE, DAX and CAC higher by over 2%.

A ruing in the German Constitutional Court to reject a series of lawsuits aimed at blocking German participation in euro zone bailouts was well received by the market. Most investors had expected the ruling though given the sensitivity of market sentiment, there was natural caution for any surprises. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds