Gold fell to a two-week low on Wednesday after its biggest one-day drop in four weeks, as expectations that Britain will vote to remain in the European Union reduced risk aversion and lent a firmer tone to stocks. The metal fell nearly 2 percent on Tuesday after two opinion polls suggested it was likely that voters would opt on Thursday to stay in the EU. Concerns over a possible vote in favour of leaving had sent gold to a near two-year high last week.
"Gold seems to have fully discounted and is anticipating that it will be a 'no' vote. That seems to be the driving force," said Bill O'Neill, co-founder of commodities investment firm Logic Advisors. "I don't think gold will go down much if the 'no' vote prevails. I do think it will go up significantly if we do get a 'yes' vote." Spot gold hit a two-week low of $1,261.01 an ounce and was down 0.1 pct at $1,266.60 an ounce by 2:35 pm EDT (1835 GMT), little changed from late on Tuesday. US gold futures for August delivery settled down 0.2 percent at $1,270 an ounce.
"The CFTC (Commodity Futures Trading Commission) on Friday evening reported record high net long positions in gold," Commerzbank analyst Daniel Briesemann said. Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold shares, rose 0.39 percent to 912.33 tonnes on Tuesday, the highest since September 2013. Among other precious metals, silver was down 0.03 pct at $17.26 an ounce, while platinum was up 0.03 pct at $976 and palladium was up 1.5 pct at $558.75.
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