Gold price drops 2% as haven demand wanes

London (Feb 22)  Gold futures on Monday fell hard, as analysts blamed the drop on investors starting out the week with a hankering for stocks and other riskier assets.

Gold futures for April delivery GCJ6, -1.88%  slumped $26.80, or 2.2%, to $1,204 an ounce, while March silver SIH6, -1.97%  dropped 35 cents, or 2.3%, to $15.03 an ounce.

Gold has fallen “as the week begins in a market environment characterized by higher risk appetite,” said Commerzbank analysts in a note Monday.

U.S. stock futures ESH6, +0.99%  have been pointing to a higher open, and European and Asian equities have advanced, with oil also gaining.

Gold futures earlier this month logged their highest settlement in a year. But the Commerzbank analysts, citing CFTC data, said the surge to a 12-month high was “speculatively driven.”

At the same time, the analysts noted that gold ETFs GLD, -0.60% on Friday saw their biggest daily inflow since October 2011. Gold futures ended higher Friday, but registered their first weekly loss in about a month.

Source: MarketWatch