Gold Closes Near 10-Month Low as Investors Look Past Italy Vote

  • Voters reject referendum on constitutional reform; Renzi quits
  • Gold posts fourth loss in five sessions as equities rise

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Gold futures closed near the lowest price in 10 months as investors shrugged off political turmoil in Italy to boost equities and other riskier assets.  

The S&P 500 advanced after Italy’s vote against constitutional reform, which prompted the country’s prime minister to resign. While the referendum has raised concerns over Italy’s future in the euro region, the nation’s political and legal system means the “no” vote is unlikely to trigger a quick exit, sapping demand for safety.

Gold has been whipsawed this year following unexpected political votes in major economies. It jumped after Britain’s vote to quit the European Union in June, then tumbled as Donald Trump’s presidential victory boosted bets that the Federal Reserve will raise interest rates this month. The metal slid the most in more than three years in November amid signs of improving U.S. economic growth.

“There’s a lesser need for safe havens such as bonds and precious metals,” David Meger, director of metals trading at High Ridge Futures in Chicago, said in a telephone interview. Precious metals “continue to be in this near-term downtrend.”

Gold futures for February delivery slipped 0.1 percent to settle at $1,176.50 an ounce on the Comex in New York. The metal posted its fourth loss in five sessions. It dropped 7.8 percent in November.

The prospect of higher U.S. rates has curbed the appeal of bullion because it doesn’t pay any yield. Investors sold metal from exchange-traded funds for a 16th day on Friday, the longest run since March 2015. Holdings dropped 2.2 metric tons to 1,859.3 tons, the lowest since June, data compiled by Bloomberg show.

“Gold remains under pressure from liquidation of longs in futures and ETFs,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Hellerup, Denmark, said by e-mail.

Money managers and other speculators are the least bullish on prices since February. They cut their net-long position on gold futures and options by 15 percent in the week to Nov. 29, U.S. government data show.

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