MELBOURNE – Gold dropped to a two-week low and bullion mining stocks sank the most in more than a year as investors favoured riskier assets on expectation that Emmanuel Macron will become France’s next president.

The metal slipped as much as 1.5% and South African gold miners plunged as much as 8.7% after pro-growth centrist Macron and nationalist Marine Le Pen won the first-round vote on Sunday. Le Pen, who wants to take France out of the euro and cut immigration, has trailed Macron in almost every opinion poll for the runoff. A second round takes place on May 7.

With the the second-round line-up avoiding the scenario of a contest between Le Pen and the Communist-backed Jean-Luc Melenchon, widespread relief across markets pushed European stocks and the euro higher, and cut gold’s gain this year to 11%. Hedge funds had recently boosted bullish gold bets and investors bought bullion through exchange-traded funds amid demand for a haven amid concerns over North Korea.

“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.”

Bullion for immediate delivery earlier fell the most since March 2 and was down 1% at $1 271.71/oz by 11:51 a.m. in London, according to Bloomberg generic pricing.

With a Macron victory seen as the most likely outcome of the French election, investors will turn their attention to the outlook for US interest rates, Dahdah said. While Federal Reserve officials are due to meet in the first week of May, traders mostly aren’t expecting a rate increase until at least June.

Gold’s slide also pulled down bullion mining stocks. The FTSE/JSE Africa Gold Mining Index was 6.4% lower in Johannesburg after reaching the lowest since March. Gold Fields and AngloGold Ashanti fell the most.

In other precious metals:
Silver dropped 0.7% to $17.8134/oz  in London. Platinum fell 0.5%, while palladium gained 0.8%.