Gold today declined for a second day as concern about Europe’s debt crisis strengthened the dollar and curbed the metal’s appeal as an alternative asset.
The gold fell 0.5 per cent to 1,548.22 dollar an ounce, after dipping to one- week low of 1,545.88 dollar. The metal has lost 7 per cent in May for a fourth monthly decline, the longest losing run since 1999.
Silver also fell 0.9 per cent to 27.60 dollar an ounce and headed for a third monthly drop.
The euro fell to the lowest level since July 2010 versus the dollar as Spanish bond yields climbed after central bank Governor
Miguel Angel Fernandez Ordonez resigned a month early amid criticism over the nationalisation of Bankia group. Gold dropped 1.6 per cent yesterday, the most in three weeks.
Spain backtracked on a plan to use government debt instead of cash to bail out Bankia, the country’s third-largest lender, while Prime Minister Mariano Rajoy struggles to shore up the nation’s lenders without overburdening public finances.