Gold Drops Below 1277 as Euro Rebound Cuts Demand

Gold futures fell the most this year on speculation that an election victory in Greece by the anti-austerity political party won’t result in the country’s exit from the euro zone, crimping demand for haven assets.

The euro rebounded from an 11-year low against the dollar as Greek Prime Minister-elect Alexis Tsipras pledged to keep the nation within the single currency area. Gold rose for three straight weeks partly as Europe’s flagging economy drove demand for a store of value.

“Most Greeks don’t want to leave the euro zone, and the euro zone doesn’t want them to leave either,” James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview. “That’s why the euro is rebounding and gold’s down.”

Bloomberg

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