Gold fell below $1,200 an ounce on Monday as equities rallied and the dollar steadied, while traders assessed China's new policy measures to shore up the world's second-largest economy and risks that Greece may default. Spot gold was down 0.8 percent at $1,194.68 an ounce by 1505 EDT, while US gold futures for June delivery fell $9.40 to settle at $1,193.70 an ounce.
US equities rallied, boosted by investment bank Morgan Stanley's report of its most profitable quarter since the financial crisis. The strong performance attracted investors, who demonstrated limited interest in gold. "The funds have to asset allocate wherever they find the performance," said George Gero, precious metals strategist for RBC Capital Markets in New York. "You have a triple digit up day in the stock market, and the funds are not asset allocating to gold."
The rally in stock markets likely contributed to an uptick in the dollar, which weighed further on gold prices, Gero said. Spot silver was down 1.7 percent at $15.94 an ounce. Platinum lost 1.8 percent to $1,143.12 an ounce and palladium fell 1.3 percent to $770.00 an ounce.
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