Gold fell on Monday as stock markets gained strength, but the metal stayed close to a four-month high hit last week on safe-haven demand from escalating tensions in the Middle East and Ukraine.
Spot gold fell nearly 2 percent to $1,313 an ounce, after posting its sixth straight weekly gain last week. The metal had hit $1,345, its highest since March, on Thursday after worries about the financial stability of Portugal’s largest listed bank Banco Espirito Santo hammered equities and stoked fears of an European banking crisis.
“The Portugal fears have subsided as markets don’t think it is going to be another widespread crisis,” said one trader in Tokyo. “However, the safe-haven demand for gold is still there due to the tensions in the Middle East. Portugal was only one reason for safe-haven bids, the geopolitical situation has not changed,” the trader said.
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