Gold futures fell the most this year on speculation that Greece’s anti-austerity party victory won’t result in the country leaving the euro currency bloc, crimping demand for haven assets.
The euro rebounded from an 11-year low as Greek Prime Minister-elect Alexis Tsipras has 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, founder of Optionsellers.com in Tampa, Florida, said in a telephone interview. “That’s why the euro is rebounding and gold’s down slightly.”
After posting two straight annual declines, gold touched a five-month high last week after the European Central Bank announced plans to increase stimulus, raising the appeal of alternatives to currencies that are being revalued. The metal dropped 29 percent in the previous two years as the American economy improved.
Gold futures for February delivery dropped 1.1 percent to $1,278.60 an ounce at 10:47 a.m. on the Comex in New York, heading for the biggest decline since Dec. 31. Trading was 52 percent above the average for this time of day over the past 100 days.
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