Gold jumped $12.34 to $1188.04 at the open of trade last night before it chopped down to see a loss of $18.23 at $1157.47 by midmorning in New York and then bounced back to $1175.85 in early afternoon trade, but it then drifted back lower into the close and ended with a loss of 0.48%. Silver dipped to $16.501 before it rose to as high as $16.861 and then also fell back off, but it still ended with a gain of 0.36%.
The most active gold contract for February delivery fell 1.3 U.S. dollars, or 0.11 percent, to settle at 1,176.50 dollars per ounce.
Gold swung after voters in Italy rejected a referendum on constitutional reform and Prime Minister Matteo Renzi announced his resignation, with investors seeking a haven in the dollar rather than the precious metal as they pored over this year’s latest ballot box-driven shift.
Gold fell US$11.52 or 0.98% to US$1,165.91 at 5.32pm, which was the lowest since February this year.
While the referendum has raised concerns over Italy’s future in the euro-region, the nation’s political and legal system means a “no” vote is unlikely to trigger a quick exit. "This is not the same as Brexit, which dramaticall changes the very fabric of U.K. politics and economics,"
A gauge of the U.S. currency climbed on Monday as investors assessed the implications of the latest upset.
“The safe haven saw an early rush on the announcement of the Italian referendum results before the market hastily took profit,” Jingyi Pan, a market strategist at IG Asia Pte in Singapore, said in a report.
“Nevertheless, the Italian referendum results may just be the tip of the iceberg as concerns over the stability of the Italian banking sector and the structural integrity of the European Union set in.”
Gold was put under further pressure as New York Fed President William Dudley told a New York City audience at an Association for a Better New York event that he would support gradual hikes as he believes the U.S. Federal Reserve is close to reaching its dual mandate of controlling inflation and promoting employment. Investors believe the Fed may raise rates from 0.50 to 0.75 during the December FOMC meeting.
According to the CME Group' s Fedwatch tool, the current implied probability of a hike from 0.50 to at least 0.75 is at 93 percent at the December meeting and 93 percent for the February meeting.
Reference: Gold Seeker, Xinhua, Bloomberg
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