Gold fell more than 1 percent on Monday as the euro slid against the dollar after Italian Prime Minister Matteo Renzi conceded defeat in a referendum over his plan to reform the constitution.
The political uncertainty in the euro zone earlier spurred safe-haven demand for gold, but the precious metal later surrendered gains to trade lower.
Spot gold was down 0.89 percent at $1,166.20 an ounce by 9:30 a.m. EDT. U.S. gold futures shed 0.83 percent to $1,168 per ounce.
“Looks like people are buying the U.S. dollar and that is in turn prompting selling in gold,” said Yuichi Ikemizu, head of commodity trading at Standard Bank in Tokyo.
“People bought gold after the Italian referendum and it looks like they are selling back.”
The euro fell to its lowest in nearly two years against the dollar after Renzi said he would resign following a stinging defeat on constitutional reform that could destabilize the country’s shaky banking system.
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 0.7 percent to $16.58 an ounce, after touching its highest in more than two weeks earlier in the session.
Platinum was flat at $927.80 an ounce and palladium slid 1 percent to $733.30 an ounce.
“We expect palladium to continue outperforming and recommend buying palladium on dips against platinum,” Mark Keenan, commodity strategist at Societe Generale, wrote in a note.
“Platinum is also facing headwinds from a weaker South African rand, which makes it more profitable to produce platinum.”
