SINGAPORE Gold tumbled more than 2 percent on Monday, pulling further away from its highest in a year, as a rebound in stocks and profit-taking from China after the Lunar New Year weighed on the market.
Bullion had climbed to a one-year high of $1,260.60 on Thursday as turmoil in global equities stoked safe-haven demand for the metal, along with the Japanese yen and U.S. Treasuries.
But Asian shares snapped a five-session losing streak on Monday following a rebound in U.S. and European stocks in the previous session, with Shanghai stocks posting only modest losses after a week-long holiday.
Spot gold fell to a session low of $1,211.05, before paring some losses to trade down 1.9 percent at $1,213.60 by 0753 GMT. It dropped 0.7 percent on Friday.
U.S. gold futures dropped as much as 2.2 percent to $1,212.20. Spot silver and U.S. silver futures fell 3 percent, tracking the yellow metal.
"Gold is lower because of the good bounce in equities and the Chinese selling," said a Sydney-based trader. "There is some profit-taking around but volumes haven't been huge."
Gold was about $60 an ounce higher than February 5, when Chinese markets were last open, prompting them to take profits.
Other Asian markets have also shown little interest in the yellow metal as a sharp rise in prices over a short period of time has put off buyers.
Assets of SPDR Gold Trust, the top gold-backed exchange-traded fund, fell 0.71 percent to 710.95 tonnes on Friday, following the sharp rise in prices.
"If financial markets continue to stabilize gold is likely to correct further," HSBC analysts said in a note.
European shares were set to follow Asia higher. E-Mini futures for the S&P 500 rose 1.1 percent, though markets in the U.S. are closed on Monday for a holiday.
Western investors have been more bullish about gold.
Last week's rally spurred a buying frenzy for U.S. bullion coins as small and large investors bet that volatile currencies and global economic concerns would lift its value even higher.
Hedge funds and money managers boosted bullish bets in COMEX gold futures and options in the week to Feb. 9 ahead of the bullion market's biggest daily rally in years, U.S. Commodity Futures Trading Commission data showed on Friday.
PRICES AT 0753 GMT
Metal Last Change Pct chg
Spot gold 1213.6 -24.06 -1.94
Spot silver 15.25 -0.46 -2.93
Spot platinum 935.49 -15.75 -1.66
Spot palladium 517.5 -1.97 -0.38
Comex gold 1213.9 -25.5 -2.06
Comex silver 15.31 -0.48 -3.04
COMEX gold and silver contracts show the
most active months
(Reporting by A. Ananthalakshmi; Editing by Joseph Radford and Tom Hogue)
This story has not been edited by Firstpost staff and is generated by auto-feed.
First Published On : Feb 16, 2016 02:30 IST