Gold prices sink as investors take profit

Investors are taking profit after weeks of gains, as moods shift around the UK’s referendum.

Gold prices sank in London on Monday, as market participants took profit following weeks of strong gains amid global economic and political uncertainty.

Spot gold was down 1.2 per cent at $US1,282.44 a troy ounce in morning European trade, moving within a $US19 range.

The metal has risen 6 per cent in value since the start of the month, largely due to safe-haven demand on fears of a possible British exit, or “Brexit,” from the European Union. Gold is widely considered a safe place for investors to park their cash, as it tends to maintain a stable level of value.

But sentiment shifted after a survey published in the Mail on Sunday showed that 45 per cent of respondents backed the UK staying in the trade bloc, compared with 42 per cent in favor of leaving. The poll-of-polls, averaging the past six polls in the UK vote, returned to 50/50, suggesting growing momentum for the “remain camp” in the June 23 referendum.

“Gold and silver prices are under pressure today as risk-on is leading to less demand and some profit-taking in safe-haven assets,” said William Adams, head of research at Fastmarkets.

Looking ahead, bullion prices are expected to be dictated by referendum news ahead of the UK vote on its EU membership on Thursday.

“Markets will continue to move on Brexit headlines,” wrote ANZ Research analysts in a note.

Among the other precious metals, spot silver was down 0.2 per cent at $US17.419 an ounce, spot platinum was up 0.7 per cent at $US971.43 an ounce and spot palladium was up 1.5 per cent at $US539.50 an ounce.

Dow Jones newswires