LONDON: Gold fell on Friday on the back of a slump in oil prices, with strength in the dollar piling further pressure on the metal ahead of a referendum on the management of Swiss bullion reserves this weekend. Oil prices posted their sharpest losses since 2011 on Thursday after OPEC refrained from cutting its output following a more than 30 percent plunge in prices since June.
Oil steadied on Friday, but remained under pressure.
Spot gold was down 0.6 percent at $1,184.44 an ounce at 1033 GMT, while US gold futures for December delivery were down $13.10 an ounce at $1,183.50. "Weakness in oil prices isn't good for gold, because inflation expectations are adjusted downwards," ABN Amro analyst Georgette Boele said.
"We've been looking at inflation expectations and oil prices and gold, and there has been a very strong relationship this year." A broad-based rally in the dollar, in which gold is denominated, also hurt prices. The dollar rose versus commodity currencies like the Canadian dollar and Norwegian crown on OPEC's decision not to reduce output.
The OPEC decision also hurt stock markets and other commodities, with copper falling to an 8-month low. Sliding oil prices are set to remain in focus as US markets reopened after the Thanksgiving holiday.
Traders are awaiting the outcome of a referendum in Switzerland this weekend on a motion to force the Swiss National Bank to raise gold holdings to 20 percent of its forex reserves, repatriate its bullion, and undertake never to sell it.
The most recent opinion poll showed support among Swiss voters for the initiative had slipped to 38 percent.
A surprise 'yes' vote could prompt the Swiss central bank to buy about 1,500 tonnes of gold over the next few years, analysts say.
"The market appears not to have priced in the chance of a 'yes' vote, and we expect the risks for the Swiss franc and gold are skewed to the upside," ETF Securities said in a note.
Silver was down 1.1 percent at $16.04 an ounce, while spot platinum was down 0.2 percent at $1,209.55 an ounce and spot palladium was down 0.4 percent at $801.50 an ounce.
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