PRECIOUS-Gold slides 1 percent as oil, stocks, euro fall
NEW YORK/LONDON |
NEW YORK/LONDON (Reuters) - Gold fell in quiet trade on Monday on weakness from equities and other commodities and fading hopes of more U.S. monetary easing could further weigh on bullion prices.
The metal, which has tended to follow riskier assets, was pressured by a one-percent drop of the S&P 500 index .SPX on renewed Europe debt fears. Heavy losses in crude oil and copper also triggered a sharp sell-off in silver which has a strong industrial demand component.
Trading volume of U.S. gold futures was sharply below average after it posted a 2012 low in the previous session, as some investors have reduced their bullish position in gold amid a brighter economic outlook.
Sentiment in the gold market remains cautious ahead of an outcome of a Federal Reserve policy meeting on Wednesday. Gold has lost more than $150 an ounce since late February after a strong run of U.S. economic data dashed hopes of more asset purchases by the Fed known as quantitative easing (QE).
"Absent any hard evidence of a true QE, there will be more asset liquidation and we are likely to see more downside than upside in the gold market," Frank McGhee, head precious metals trader at Integrated Brokerage Services LLC.
Spot gold was down 0.6 percent at $1,631.59 an ounce by 1:45 p.m. EDT (1745 GMT). Earlier in the session, gold hit a low of $1,623.90, around $10 away from its lowest level of the year.
U.S. gold futures for June delivery settled down $10.20 an ounce at $1,632.60, after they posted a one-percent decline last week.
Trading volume was around 115,000 at 2 p.m. On Friday, COMEX gold volume totaled less than 97,000 lots for its lowest level since December 2011.
Physical gold demand remained light in major consumer India even ahead of the Akshaya Tritiya festival on Tuesday, an auspicious gold buying event.
Among other precious metals, silver fell 3.2 percent at $30.64 an ounce, spot platinum dropped 1.3 percent at $1,552.64 an ounce and spot palladium was down 0.6 percent at $667.45 an ounce. 1:45 PM EDT LAST/ NET PCT LOW HIGH CURRENT
(Editing by Sofina Mirza-Reid)
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