NEW YORK/LONDON (Reuters) - Gold prices fell in quiet trade on Monday, following crude oil’s losses, as worries about Spain’s ability to repay its debt and a resurgent euro zone debt crisis extended bullion’s loss to a second day.
Silver traded flat, with data showing stocks in U.S. exchange warehouses rose sharply due to lackluster industrial demand and rising mine output.
Bullion came under pressure as Spanish 10-year government bond yields broke through the 6 percent mark for the first time since December, overshadowing optimism generated by encouraging U.S. retails sales data.
The metal has dropped about 8 percent from near $1,800 an ounce at the end of February as a strong run of positive U.S. economic data reduced market hopes about a third round of asset buy back by the Federal Reserve known as quantitative easing to boost growth.
“As long as the general impression of economic stability is positive, money managers will tend to move away from the yellow metal and towards the paper investments with promise of higher returns,” said Carlos Perez-Santalla, precious metals trader at PVM Futures.
Spot gold was down 0.5 percent at $1,649.71 an ounce by 2:32 p.m. EST (1832 GMT).
U.S. gold futures for June delivery settled down $10.50 an ounce at $1,649.70.
Trading volume in U.S. gold futures was about 40 percent below its 30-day average, on track to be one of the lowest for the year, preliminary Reuters data showed.
Bullion fell on Monday as safe-haven U.S. Treasury debt prices rose due to renewed jitters about Spanish debt. Tumbling Brent crude oil prices due to easing supply worries also pressured gold.
Concerns over the euro zone were a key factor behind the rise in gold prices last year, but have since been outweighed by the impact of a stronger dollar.
Earlier in the session, the metal tracked losses in U.S. equities, but gold remained lowered even though the Dow turned higher with a triple-digit gain.
Silver was up 10 cents at $31.47 an ounce. The gold/silver ratio, or the number of silver ounces needed to buy an ounce of gold, held near its highest since late January, suggesting silver’s underperformance relative to gold.
U.S. silver stocks in exchange-approved warehouses rose 141.59 million ounces as of Friday, up from 140.61 million ounces in the previous day and 102.65 million ounces a year ago., according to Reuters data.
Among other precious metals, spot platinum was down 1.5 percent at $1,570.49 an ounce. Spot palladium was up 1.5 percent at $648.62 an ounce.
SETTLE CHNG CHNG VOL US Gold JUN 1649.70 -10.50 -0.6 1642.00 1659.60 104,356 US Silver MAY 31.373 -0.017 -0.1 31.175 31.700 35,531 US Plat JUL 1575.80 -12.10 -0.8 1563.00 1589.90 5,807 US Pall JUN 650.70 3.50 0.5 635.50 653.75 2,298
Gold 1649.71 -8.87 -0.5 1641.85 1657.30 Silver 31.470 0.010 0.0 31.210 31.690 Platinum 1570.49 -24.51 -1.5 1565.00 1581.49 Palladium 648.62 9.52 1.5 639.27 651.25
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 111,942 199,141 197,175 19.64 -0.63 US Silver 44,215 51,755 59,826 30.89 0.93 US Platinum 5,859 10,412 8,459 19.92 0.05 US Palladium 2,301 3,525 4,697
Editing by Bob Burgdorfer and Sofina Mirza-Reid