Gold slumped after Swiss voters rejected a plan for their central bank to accumulate bullion and oil extended declines to a five-year low, curbing demand. Silver plunged to the lowest price since 2009 as the dollar climbed.
Bullion for immediate delivery fell as much as 2.1 percent to $1,142.88 an ounce, the lowest level since Nov. 7, when it dropped to a four-year low of $1,132.16. The metal traded at $1,149.88 at 9:21 a.m. in Singapore, according to Bloomberg generic pricing. Silver lost as much as 6.7 percent.
Gold posted a third monthly drop in November as the Federal Reserve ended a bond-buying program that failed to stoke inflation amid lower energy prices. Crude fell to the lowest price since 2010 as the Organization of Petroleum Exporting Countries took no action to ease an oversupply. A proposal that would have required the Swiss National Bank to hold a fixed portion of its assets in bullion was voted down by 77 percent to 23 percent in a referendum yesterday.
“Precious metals have been dragged down by lower energy prices as inflation concerns ease,” said Sun Yonggang, a Shanghai-based macroeconomic strategist at Everbright Futures Co. “Now that the support from the Swiss vote has been removed, the focus shifts back to the Fed and the divergence in monetary policies between the U.S. and other central banks.”
The “Save Our Swiss Gold” measure would have required the central bank to hold at least 20 percent of its assets in bullion from 8 percent. Had it been approved, it would have led to purchases of at least 1,500 metric tons over five years.
Gold is on course for the first back-to-back annual drop since 2002 as the Fed moves closer to raising borrowing costs amid an improving U.S. economy, while other central banks add to stimulus. The Bloomberg Dollar Spot Index rose 0.2 percent today, heading for the highest close since March 2009.
Gold for February delivery sank as much as 2.9 percent to $1,141.70 an ounce on the Comex, the lowest for a most-active contract since Nov. 7. Holdings in the SPDR Gold Trust fell for a second day on Nov. 28 to 717.63 metric tons, the least since September 2008.
India, the biggest user of gold after China, unexpectedly scrapped rules requiring importers to sell 20 percent of their purchases to jewelers for re-export to remove distortions in shipments and curb smuggling.
Silver for immediate delivery retreated to $14.4235 an ounce, the lowest price since August 2009, and traded at $14.9115. The metal completed a fifth month of losses in November for the longest such slump since June 2013.
Spot platinum declined as much as 1.5 percent to $1,182.63 an ounce, the lowest since Nov. 19, before trading at $1,189.38. The metal posted a fifth monthly drop in November in the longest losing run since June 2013.
Palladium lost 1.6 percent to $796.50 an ounce, halting seven days of gains that was the longest rally since August.
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