Gold prices fell more than 1% on Monday as investors chose the safety of the U.S. dollar and government bonds, spooked by Turkey`s abrupt decision to replace its central bank head with a critic of high interest rates.

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Spot gold was down 0.8% to $1,731.38 per ounce by 1052 GMT. U.S. gold futures slipped 0.6% to $1,730.60.

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"We are seeing somewhat a stronger dollar after the situation in Turkey, which is also a major buyer of gold. Some might suggest that Turkish citizens, given the fact their currency is plummeting, will not be buying as much gold going forward," Commerzbank analyst Eugen Weinberg said.
The U.S. dollar firmed after Turkey`s President Tayyip Erdogan replaced a hawkish central bank chief with an opponent of tight monetary policy on Saturday, which sent the lira close to its all-time low.
Gold, which is priced in dollars, also lost safe-haven flows to the Japanese yen and bonds, with the metal lower despite a fall in U.S. benchmark Treasury yields.
Following solid gains in 2020, gold prices have come under pressure this year as a recent spike in Treasury yields weighs on the non-yielding commodity.
"The whole commodity space got out of bed on the wrong side, we got negative price action across the board," Saxo Bank analyst Ole Hansen said. "Lower risk appetite to start the week and the (gold) market is not really catching a bid despite the higher bond prices."
Gold may retest support at $1,716 per ounce, a break below which could cause a fall into the range of $1,669 to $1,691, according to Reuters technical analyst Wang Tao.
Other precious metals were also lower, palladium dipped 0.3% to $2,628.09 per ounce, silver fell 2.7% to $25.54 and platinum slipped 2.2% to $1,170.71