Gold dropped to a four-month low on Wednesday, pressured by a weaker euro as investors fretted about the political upheaval in Greece that threatens to sink the country into chaos and endanger the euro zone's efforts to end the debt crisis.
Spot gold dropped to as low as $1,586.74 an ounce, unseen since early January, extending a 2-percent slide from the previous session. It stood at $1,593.56 by 0557 GMT. U.S. gold also dropped to a four-month low at $1,587.40.
The Leftist candidate for prime minister in Greece has so far failed to form a government, as his opposition to a bailout deal seen crucial for the economy alienated mainstream parties and shook market confidence that the euro zone will pull itself out of the debt crisis.
Nervous investors sought out safe haven assets such as the dollar and German Bund, while gold remained lock-stepped with the euro and riskier assets.The euro was headed for its eighth straight session of losses against the dollar and fell close to a recent three-month low.
"The situation in Europe is difficult, but what's happening is that anything that's slightly tainted with risk is being sold, even though the real risk associated with that product is less than one could justify by its price movements," We expect the next level of support for gold to be $1,580 after it broke through $1,620, the lower end of the price range it held for a month, and the psychologically important $1,600 level in one day.
Spot gold dropped to as low as $1,586.74 an ounce, unseen since early January, extending a 2-percent slide from the previous session. It stood at $1,593.56 by 0557 GMT. U.S. gold also dropped to a four-month low at $1,587.40.
The Leftist candidate for prime minister in Greece has so far failed to form a government, as his opposition to a bailout deal seen crucial for the economy alienated mainstream parties and shook market confidence that the euro zone will pull itself out of the debt crisis.
Nervous investors sought out safe haven assets such as the dollar and German Bund, while gold remained lock-stepped with the euro and riskier assets.The euro was headed for its eighth straight session of losses against the dollar and fell close to a recent three-month low.
"The situation in Europe is difficult, but what's happening is that anything that's slightly tainted with risk is being sold, even though the real risk associated with that product is less than one could justify by its price movements," We expect the next level of support for gold to be $1,580 after it broke through $1,620, the lower end of the price range it held for a month, and the psychologically important $1,600 level in one day.
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