Gold extends drop for fourth day as decision day arrives in UK

[SINGAPORE] Gold dropped for a fourth straight day as investors prepared for the outcome of Britain's referendum on membership of the European Union, with voting set to start at 7 am local time.

Bullion for immediate delivery lost as much as 0.4 per cent to US$1,260.69 an ounce, the lowest price since June 9, and traded at US$1,262.01 at 7:41 am Singapore. It fell 2.5 per cent in the opening three days of the week.

The metal, which rallied to the highest since 2014 last week, has dropped amid speculation voters will keep the country in the EU, diminishing demand for a haven.

While polls in the lead up to voting day have shown a tight race, bookmakers' odds favor a 'Remain' victory. Governments and central bankers have warned a vote for Brexit may spark turmoil.

A decision to leave may propel gold to US$1,400 an ounce, while the opposite result would hurt prices that have been supported this year by the US Federal Reserve standing pat on interest rates, according to Societe Generale SA. Either result would lift bullion's volatility, the bank said.

BLOOMBERG