Gold fell 1% for a second straight session on Monday to hit a one-week low and platinum sank to its lowest level in more than two months, after climbs in Spanish bond yields fed concerns about the euro zone debt crisis and hit appetite for riskier assets.
In addition to the rise in Spain's 10-year government bond yields to above 6%, weaker-than-expected growth data from China and signs that momentum for the U.S. economic recovery was slowing also weighed on sentiment.
"The market in general is feeling a bit risk-averse and we can see commodities weaker across the board," said Nick Trevethan, senior commodity strategist at ANZ in Singapore, adding that gold could fall towards USD 1,620.
Spot gold fell 1% to a one-week low of USD 1,640.64 an ounce, and stood at USD 1,642.66 by 0708 GMT.
It fell victim to a broad sell-off in risk assets on Friday, although for the week renewed expectations of U.S. monetary easing helped it post a 1.7% rise - its biggest one-week gain since late February.
Technical analysis suggests spot gold will drop to USD 1,630 an ounce during the day, Reuters market analyst Wang Tao said.
U.S. gold also slipped 1% to USD 1,642 before recovering slightly to USD 1,643.80.
The dollar index rose to its highest in a week and half, extending gains from Friday, at the expense of a weak euro which fell to a two-month low versus the greenback.
Activity in Asia's physical market was sluggish, as buyers remained on the sidelines, awaiting a further drop in prices.
"Since we failed to break below USD 1,650, today is mostly likely another quiet day," said a Singapore-based dealer. "We are back to square one."
Spot platinum was a major decliner among precious metals during Asia time, sliding more than 2% to USD 1,556.5 an ounce, its lowest in more than two months, before recovering slightly to USD 1,562.49.
Platinum, mainly used in autocatalysts and jewellery, is prone to economic downturns. Prices fell more than 20% last year due to the turbulence in the global economy.
Spot silver dropped to a one-week low of USD 31.16 an ounce, before paring some losses to USD 31.24. The metal slid 2.5% in the previous session.
"There seems to be a lot of downward pressure mainly due to the stronger dollar," said a Shanghai-based trader. "Demand-wise, industrial demand is similar to the levels in the past few years but investment demand may be weaker than last year's."
Speculators cut their net long exposure in gold and silver in the week ended April 10, the U.S. Commodity Futures Trading Commission said.
