LONDON, Sept 11: Gold prices plunged on Monday below $600 an ounce for the first time in more than two months as investors weighed bullion’s prospects in the face of lower oil prices.

The metal trimmed losses in early European trade with a recovery in the euro against the dollar, but traded much below its close in New York late on Friday. Other precious metals broadly tracked gold.

Frederic Panizzutti, metals analyst at MKS Finance, said a move below $610 an ounce raised some fears in the market that gold could extend losses.

I think that the move lower has now found some base around $594-$593, still with New York opening, we would expect the market to remain volatile and some long liquidation is fairly possible this afternoon, he said.

Medium term I am still bullish. Short-term, I remain bullish but not 100 per cent confident that a move higher will start from here. Gold fell more than three per cent to $592 an ounce, the lowest since June 29, before rising to $596.50/598.00 broadening last week’s losses.

This sell-off may therefore provide a long-term buying opportunity. But in the near term, the precious metals markets are under strong pressure, and penetration of further support levels may trigger greater fund liquidation, HSBC Bank said.

Gold has fallen 7.5 per cent since last Wednesday, but still higher by about 15 per cent from its level at the start of the year. Gold surged to a 26-year high of $730 in mid-May.

In currencies, the euro recovered from six-week lows against the dollar, boosted after a European Central Bank policymaker signalled that markets were correct in expecting another interest rate hike next month.

In other precious metals, silver fell to a six-week low of $11.64 an ounce before rising to $11.81/ 11.88, against $12.14/ 12.21 in the US market.

Platinum was at $1,207.50/ 1,215.50, down from $1,228/1,233 an ounce, while palladium was at $315/320 an ounce, versus $322/ $327.

In industry news, the world’s fourth-biggest gold producer, Gold Fields , announced a set of three transactions worth more than $2.5 billion to increase its stake in the South Deep Gold Mine in South Africa. —Reuters