Gold loses shine as it falls back below $1,300

Jessica Morris
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Gold bars are seen at the Czech Central
Analysts said that gold's fate was tied to the upcoming EU referendum (Source: Getty)

The softer dollar pulled gold back from a two-year high today, as investor anxiety about next week's EU referendum eased slightly.

The precious metal is still on course for its third weekly gain, with spot gold rising 0.7 per cent to $1,286.82 an ounce in early afternoon trading. US gold, however, slumped 0.6 per cent to $1,290.20.

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It came after the campaign operations were suspended by both sides following the tragic death of MP Jo Cox yesterday. Brexit fears had helped gold breach the $1,300 mark earlier in the day, rising as high as $1,315.55.

Analysts said that gold's fate was tied to the upcoming vote on 23 June, which could send investors scrambling into the safe-haven asset if the UK opts to leaves the EU.

Read more: Three reasons why experts suggest gold prices are going to keep rising

"We expect gold will be keenly sensitive to perceived shifts in public opinion ahead of the referendum. This likely leaves gold prices open to highly volatile trading," James Steel, HSBC analyst, said in a note.

"Shifts in how investors perceive the outcome of the referendum could help define gold's near-term price path."

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