[LONDON] Gold fell to a two-week low on Thursday as the last sweep of opinion polls before Britain's referendum on EU membership began gave the campaign to stay in the bloc a slight edge.
Britons were voting on Thursday in the referendum that has divided the nation. The polling will close at 2100 GMT, with results expected early on Friday.
Spot gold was down 0.4 per cent at US$1,262.89 an ounce by 1416 GMT, after hitting US$1,257.91, its lowest since June 9.
The metal, often perceived as a hedge against economic and financial uncertainty, reached a near two-year high on June 16, as wider markets reacted to mounting concerns over the prospect of Britain pulling out of the EU and sought protection in 'safe'assets. They also included German bunds, the Swiss franc and Japan's yen, but the rally was short-lived.
"The fear we had mid last week about Britain leaving the EU appears to be waning and that's also why gold has retreated," Julius Baer analyst Carsten Menke said.
"In case of a "Leave" win, any rise in gold would not be long lasting because this would not result in a deep economic or financial crisis," Mr Menke said, adding that a "Remain" vote would see prices fall towards the US$1,200 mark.
Polls by ComRes, conducted for the Daily Mail newspaper and ITV television, and by YouGov for The Times newspaper in London, showed a last-minute rise in support for Britain to remain in the EU.
In wider markets, sterling hit a 2016 high against the dollar and world stocks climbed for a fifth day running.
Investors piled on near-term bullish and bearish options bets on Wednesday, racing to protect against price swings during Britain's vote, data showed.
The outcome of Britain's referendum could also influence the US Federal Reserve's decision to lift interest rates sooner rather than later, analysts said.
"A remain vote could give the Fed more confidence to raise rates... and the next nonfarm jobs report will be the next focus for the market," Danske Bank senior analyst Jens Pedersen said.
Markets will continue to monitor US economic data for clues over the timing of the next rate hike.
Higher interest rates are bearish for gold because the opportunity cost of holding it rises and the dollar increases, making it more expensive.
Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.4 per cent to 915.90 tonnes on Wednesday, the highest since September 2013.
Among other precious metals, silver rose 0.3 per cent to US$17.30 and platinum was down 0.4 per cent at US$963.99. Palladium rose 0.4 per cent to US$562.05 an ounce.