BackGold prices fall 1% as euro drops after Italy votes against reforms
Spot gold was down 1.2 % at $1163.01 an ounce by 2.16pm. US gold futures shed 1.1% to $1,164.70 per ounce
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Bengaluru: Gold prices fell more than 1% on Monday as the euro slid against the dollar after Italian Prime Minister Matteo Renzi conceded defeat in a referendum over his plan to reform the constitution.
The political uncertainty in the euro zone earlier spurred safe-haven demand for gold, but the precious metal later surrendered gains to trade lower. Spot gold was down 1.2 % at $1163.01 an ounce by 08.46 GMT (2.16pm). US gold futures shed 1.1% to $1,164.70 per ounce.
“Looks like people are buying the US dollar and that is in turn prompting selling in gold," said Yuichi Ikemizu, head of commodity trading at Standard Bank in Tokyo. “People bought gold after the Italian referendum and it looks like they are selling back."
Also read: Gold prices fall on weak global cues
The euro fell to its lowest in nearly two years against the dollar after Renzi said he would resign following a stinging defeat on constitutional reform that could destabilise the country’s shaky banking system. Speculators reduced their net long position in gold futures and options by 17,843 lots to 103,392 lots, the lowest since February, US Commodity Futures Trading Commission data showed on Friday.
Tracking losses in gold, silver dropped 0.7% to $16.58 an ounce, after touching its highest in more than two weeks earlier in the session. Platinum was flat at $927.80 an ounce and palladium slid 1% to $733.30 an ounce. “We expect palladium to continue outperforming and recommend buying palladium on dips against platinum," Mark Keenan, commodity strategist at Societe Generale, wrote in a note.
“Platinum is also facing headwinds from a weaker South African rand, which makes it more profitable to produce platinum." Reuters
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