(Reuters) - Gold prices fell about 2 percent on Thursday, on course for a fourth consecutive session of losses, as investors were spooked by worries whether Europe will achieve a cure for its debt crisis.
Other precious metals also sold heavily, with platinum leading the decline with its biggest daily fall in more than three weeks.
Traditionally investors see gold as a safe-haven asset, but a cloudy global economic outlook has taken the shine off bullion as its price tracks moves of riskier assets, including equities and other commodities.
French President Nicolas Sarkozy said efforts to secure a deal to tackle the euro zone debt crisis were stalled over methods to increase the firepower of the bloc's rescue fund.
"Every commodity is falling as market participants turn pessimistic over what is happening in Europe," said Hou Xinqiang, an analyst at Jinrui Futures in China.
The 19-commodity Reuters-Jefferies CRB index .CRB posted its sharpest one-day fall this month with a fall of 1.3 percent
on Wednesday.
"We are likely to see more downside in commodities in the near term, with the gloomy macroeconomic backdrop, but gold may hold up relatively well due to its safe haven nature, even though its commodity identity has been more pronounced lately," the Jinrui analyst said.
Spot gold fell nearly 2 percent to a two-week low of $1,609.24 an ounce, before recovering slightly to $1,614.24 by 0545 GMT.
U.S. gold dropped 1.9 percent to $1,616.40.
The technical outlook for spot gold has turned bearish. Bullion may fall to $1,596 during the day, said Reuters market analyst Wang Tao.
The most active gold futures contract on the Shanghai Futures Exchange fell 3 percent to 330.18 yuan a gram ($1,612.02 an ounce), taking a cue from the sharp sell-off in other commodities.
"Funding is very tough, so some positions were being closed," said a Singapore-based trader, adding that the next support would be around $1,585, near a previous low hit on Sept 29.
The price dip failed to trigger a rush of physical buying, to the surprise of some dealers.
"I was expecting calls from customers asking for physicals, but it has been surprisingly calm," said a Singapore-based dealer. "There is some buying, but no one is in a rush. Customers probably expect prices to trend lower and we may see heavy buying around $1,600."
Spot platinum dropped nearly 4 percent to $1,449.99 an ounce, falling below its 10-day moving average above $1,520.
The Relative Strength Index on spot platinum dipped below 30 for the first time in nearly two weeks. A level below 30 usually signals an oversold market.
Spot silver eased 0.7 percent to $30.74 an ounce, and U.S. silver futures lost as much as 2.5 percent to $30.51.
`
