Gold declined for a second day in London as concern about Europe's debt crisis strengthened the dollar and curbed the metal's appeal as an alternative asset.
The euro fell to the lowest level since July 2010 versus the dollar as Spanish bond yields climbed after central bank Governor Miguel Angel Fernandez Ordonez resigned a month early amid criticism over the nationalization of Bankia group. Gold dropped 1.6 per cent yesterday, the most in three weeks.
‘‘The pressure on the euro and increased demand for the dollar is likely to keep the precious metals under pressure,'' James Moore, an analyst at TheBullionDesk.com in London, said today in a report. Gold prices may be supported near the December low of about $1,522 an ounce, he said.
Longest losing run
Bullion for immediate delivery fell 0.4 per cent to $1,548.78 an ounce by 11:35 am in London. Prices reached a one-week low of $1,545.88 yesterday and are 7 per cent lower in May for a fourth monthly decline, the longest losing run since 1999. August-delivery futures were little changed at $1,549.40 on the Comex in New York.
Gold at the morning "fixing", used by some mining companies to sell output, declined to $1,548.75 an ounce in London from $1,579.50 yesterday afternoon.