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Singapore - Gold fell for the third time in four days amid simmering anxiety over the outcome of a UK referendum on European Union membership, with separate polls showing leads for both sides.
Bullion for immediate delivery fell as much as 0.5% to $1 282.95 an ounce and traded at $1 284.28 at 08:35, according to Bloomberg generic pricing. The metal fell as much as 1.6% on Monday, the biggest intraday drop in about a month, as investors bet the referendum was swinging in favor of “Remain”, reducing haven demand.
Gold has gained 21% this year as uncertainty in global financial markets turned investors to haven assets.
The metal has been highly correlated with expectations of the outcome of a UK referendum on EU membership, with a greater probability of the UK staying in the union negative for bullion. A survey over the weekend showed “Remain” with a three-point lead, while the latest YouGov/Times poll showed the support at 42%, behind “Leave” at 44%.
“Recent roller-coaster price action in markets clearly shows the binary nature of the trend in the Brexit polls,” Australia & New Zealand Banking Group said in a note on Tuesday. “Gold prices fell slightly as concerns that the UK would leave the EU eased.”
Bullion holdings
In the run-up to the vote, investors have added to holdings in gold-backed exchange-traded funds. As of Friday, the assets in ETFs rose 0.4% to 1 895.13 metric tons, the highest since October 2013.
The metal rallied last week to the highest in almost two years as US Federal Reserve chair Janet Yellen said the British vote was a factor considered by officials as they decided to keep interest rates unchanged. She’s scheduled to testify on monetary policy before lawmakers on Tuesday and on Wednesday.
“Gold is holding onto the recent range without displaying any direction,” Harish Galipelli, head of commodities and currencies at Inditrade Derivatives & Commodities, said in an email. Today’s decline “can be attributed to mild profit-booking due to Brexit uncertainty which may result in wild swings on D-day.”
In China, bullion of 99.99% purity was unchanged at $1 286.66 an ounce on the Shanghai Gold Exchange. Silver fell 0.2%, while platinum and platinum both added 0.4%.
