Turkey currency crisis: Gold down as investors turn to US Treasuries

Employees
push a trolley laden with crates of one kilogram gold bars at the
YLG Bullion International Co. headquarters in Bangkok,
Thailand.

Getty
Images/Dario Pignatelli/Bloomberg

Gold
prices hit their lowest level in nearly a year and a half Monday
as investors turned to US Treasuries in the face of a currency
crisis in Turkey that analysts say could spill across
borders. 

Gold dipped below $1,200 an ounce Monday morning to its weakest
point since early 2017. It was trading down 1.3% at $1,196.27 an
ounce around 12:15 p.m. ET. Silver
also took a hit, trading lower by 1.5% to $15.05 an ounce. It was
trading at its lowest level since April 2016.  

Investors have recently favored US government bonds as a
safe-haven asset, meaning they had to purchase dollars. A
stronger greenback makes dollar-denominated assets like gold more
expensive for holders of other currencies. 

A
sharp currency sell-off in Turkey, which holds large amounts
of foreign debt, has raised contagion risks and put global
markets on edge. The Turkish lira lost more than a fifth of its
value against the dollar last week and continued to weaken on
Monday.

Gold is down 5.4% this year. 

Markets Insider