Gold falls, silver drops on dragging oil prices, strong dollar
New York (Nov 28) Gold fell over 2 percent on Friday, extending a three-day slide to a two-week low, and silver dropped the most since September 2013 on free-falling oil prices and a strong dollar.
Spot gold was down 1.9 percent at $1,168.56 an ounce by 1:28 p.m. EDT (1816 GMT), after hitting a low of $1,165.04. U.S. gold futures for December delivery closed down $21.40 an ounce at $1,175.20, but ended November slightly higher.
U.S. oil prices tumbled 7 percent, extending a huge rout on bearish sentiment.
The U.S. dollar rose versus commodity currencies such as the Canadian dollar and Norwegian crown on OPEC's decision not to reduce output.
The stronger dollar weighs on gold and other greenback-traded commodities as it makes them more expensive to holders of other currencies.
"Everything is stemming from crude (oil). People are liquidating," said Phillip Streible, senior commodities broker at RJO Futures in Chicago.
Traders awaited the outcome of a referendum in Switzerland on Sunday on a motion to force the Swiss National Bank to raise gold holdings to 20 percent of its foreign exchange reserves, repatriate its bullion and undertake never to sell it.
"The likelihood of this going through is pretty remote," said Ross Norman, chief executive officer of broker Sharps Pixley.
A surprise "yes" vote could prompt the Swiss central bank to buy about 1,500 tonnes of gold over the next few years, analysts said.
Elsewhere, India has decided to scrap the rule that required trading companies to export 20 percent of the gold they imported, known as the 80:20 scheme, local television channels reported on Friday, citing government sources.
Silver was down 4.3 percent at $15.52 an ounce after tumbling as much as 5 percent, while spot platinum was down 0.8 percent at $1,201.70 an ounce.
Spot palladium bucked the trend, up 0.5 percent at $808 an ounce. It rose due to worries over potential supply crunches from Russia, Streible of RJO Futures said.
Source: Reuters
