Gold Drops to 4-1/2-Month Low

Gold prices fell to a 4-1/2-month low on Monday, hit by concerns about a worsening debt crisis in the euro zone following political deadlock in Greece which fueled risk aversion and put pressure on the euro.

Spot gold hit a session low at $1,556.61 an ounce, its lowest since December 30, 2011, before recovering slightly to trade at $1,561.10 an ounce at 1323 GMT, down 1.1 percent from $1,578.30 hit late in New York on Friday. Gold has moved in tandem with riskier assets this year as the turmoil in Europe sent the euro to multi-month lows and investors turned to the safety of the dollar, analysts said. Gold is under severe pressure.

The U.S. dollar is being seen as a safe haven at the moment and as long as the dollar is appreciating against the euro this is clearly weighing on the gold price," said Daniel Briesemann, analyst at Commerzbank. "I wouldn't be surprised if we test the December low of around $1,520 an ounce and if we don't stop here we could go below $1,500." More...