Gold lost 3 percent in Europe on Monday (October 27) as the Dollar hit a two-year high against the Euro denting Gold’s appeal as an inflation hedge, resulting in quick selling of the precious metal to meet margin calls.
Platinum and Silver were also included in the sell-off, taking platinum down 6 percent as traders were fearful of the demand outlook for the metal.
Spot gold was down from $733.30 an ounce in New York on Friday to $715.70/718.20 an ounce at 10.13 GMT today. IN earlier trading it hit a low of $706.10.
As gold investors become fearful they the value of gold they rushed to put their money into the Yen and US currency. Funds liquidate their bullion holdings to cover losses in other markets and puts pressure on Gold.
India saw great demand for gold jewellery over the weekend which is gold’s largest market globally although this is mainly to do with the Dhanteras festival so is likely to retreat on Tuesday. Platinum fell 7 percent to $732.50 a seasonal low.
