Gold Posts Largest Fall in Three Weeks

November 28, 2012 at 15:23

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Gold fell more than 2 per cent, its largest decline in three weeks, on the back of a strengthening dollar and amid worries about the US budget talks.

The yellow metal was also hit by renewed worries about Greek debt, despite an agreement this week on aid among eurozone finance ministers. Gold investors took their cue from the euro, which lost ground after a shortlived lift on the Greek debt deal.

After falling through key support levels, the yellow metal fell to $1,705.64 a troy ounce on technical selling before trading down 1.9 per cent at $1,710.63 a troy ounce.

Traders and brokers noted the persistent lack of physical demand in gold. Indian investors, until recently one of the leading buyers of the yellow metal, have been largely absent as have Chinese buyers.

“We really need more investment in the actual market itself to see higher prices,” said David Govett, head of precious metals at commodities broker Marex Spectron.