LONDON: Gold prices sank below $1,200 per ounce for the first time in 17 months on Mon­day, losing out to US Treasuries and a stronger dollar as investors sought refuge from a financial market rout triggered by a crashing Turkish lira.

Spot gold had dropped 0.9 per cent to $1,199.36 an ounce by 1406 GMT, having earlier dipped to $1,194.61, its lowest since March 2017.

US gold futures were down 1pc at $1,206.80.

“Gold is not doing what a lot of investors had hoped it would do,” said Andrew Cole, multi asset manager at Pictet Asset Management, referring to gold losing its safe-haven appeal.

“The longer it doesnt behave as a risk-off hedge the more likely it is that it won’t.” Bearish sentiment can be seen in data from US Commodity Futures Trading Commission showing gold speculators added 22,195 contracts to their net short position in the week to Aug 7, bringing it to 63,282 contracts, the largest since records became publicly available in 2006.

Holdings of the largest gold-backed exchange-traded fund (ETF), New York’s SPDR Gold Trust, at 25.3 million ounces have dropped about 10pc from their April peak and are at their lowest since Feb 2016.

Silver slipped 0.5pc to $15.19, platinum fell 2.3pc to $808 per ounce, and palladium lost 0.7pc to $903.69.

Published in Dawn, August 14th, 2018