Gold dropped to its lowest in 10 months on Monday, December 5, as global stocks firmed up after investors shunned concerns of political instability in Italy, while U.S. Treasury yields rose after U.S. economic data.
Spot gold slid by as much as 1.6 percent to its lowest since February at $1,157 an ounce and was down 1.5 percent at $1,159.61 by 1525 GMT. U.S. gold futures shed $17 to $1,160.80, Reuters reports.
The benchmark 10-year U.S. Treasury yield rose, as the Institute for Supply Management said the pace of growth among domestic services industries accelerated more than forecast in November.
As gold pays no interest, the rise in returns from U.S. bonds is seen as negative for the metal.
The precious metal was also under the pressure because of stronger European and U.S. shares, as investors were reassured by expectations the European Central Bank (ECB) would step in if needed. The next ECB policy meeting is on Thursday.
Higher appetite for risk curbs the appeal of assets viewed as safer, such as gold.
Gold fell more than 8 percent in November, hurt by a jump in the dollar and Treasury yields after Donald Trump’s surprise election to the U.S. presidency led to speculation that his commitment to infrastructure spending would spur growth and inflation.
Prices had touched a two-year high in July as investors scoured for safe assets following Britain’s vote to leave the EU and on uncertainty about U.S. interest rate increases.
Speculators reduced their net long position in gold futures and options by 17,843 lots to 103,392 lots, the lowest since February, U.S. Commodity Futures Trading Commission data showed on Friday.
Tracking losses in gold, silver dropped 0.9 percent to $16.56 an ounce, after touching its highest in more than two weeks earlier in the session.
Platinum was up 0.4 percent at $930.60 an ounce and palladium rose 0.3 percent to $742 an ounce.
