Gold Prices Fall as Investors Take Profit
London (Jun 20) Gold prices sank in London on Monday, as market participants took profit following weeks of strong gains amid global economic and political uncertainty.
Spot gold was down 1.2% at $1,282.44 a troy ounce in morning European trade, moving within a $19 range.
The metal has risen 6% in value since the start of the month, largely due to safe-haven demand on fears of a possible British exit, or “Brexit,” from the European Union. Gold is widely considered a safe place for investors to park their cash, as it tends to maintain a stable level of value.
But sentiment shifted after a survey published in the Mail on Sunday showed that 45% of respondents backed the U.K. staying in the trade bloc, compared with 42% in favor of leaving. The poll-of-polls, averaging the past six polls in the U.K. vote, returned to 50/50, suggesting growing momentum for the “remain camp” in the June 23 referendum.
“Gold and silver prices are under pressure today as risk-on is leading to less demand and some profit-taking in safe-haven assets,” said William Adams, head of research at Fastmarkets.
Looking ahead, bullion prices are expected to be dictated by referendum news ahead of the U.K. vote on its EU membership Thursday.
“Markets will continue to move on Brexit headlines,” wrote ANZ Research analysts in a note.
Among the other precious metals, spot silver was down 0.2% at $17.419 an ounce, spot platinum was up 0.7% at $971.43 an ounce and spot palladium was up 1.5% at $539.50 an ounce.