Gold was set for its biggest one-day fall in three months
Gold was set for its biggest one-day fall in three months on Monday, under pressure from a robust dollar, which in turn choked off demand from consumers in key regions such as India. Last week’s summit of European Union leaders yielded a historic agreement on beefing up fiscal discipline in the 27-member bloc, but fell short of market expectations for a more drastic solution to the crisis.
This lack of confidence in Europe pushed investors into the relative safety of the U.S. dollar, rather than gold, which has fallen by about 5 percent in the last week alone. A stronger dollar often encourages non-U.S. holders of gold to sell the metal to lock in a higher profit in their own currencies and in India, the world’s largest consumer of bullion, this has kept jewellers and other consumers at bay.
Spot gold was last quoted down nearly 3 percent at $1,659.66 an ounce by 1508 GMT, its lowest in three weeks.