Gold declined under pressure from the rising US dollar, which was the investment of choice for traders looking for a safe harbour.
Investors turned to the American currency to protect their wealth after borrowing costs for Spain and Portugal went up, reviving fears over Europe’s debt situation.
Gold is seen as an alternative investment to the US dollar and usually moves inversely to the American currency.
Ireland just accepted a €85 billion bailout from the European Union and it was reported last week that Portugal was now under pressure to follow suit and request financial aid.
Gold and platinum fell to US$1,360/oz and US$1,634/oz respectively. Silver went in the opposite direction, rising to US$26.74/oz.
Gold producers African Barrick Gold (LON:ABG) and Randgold Resources (LON:RRS) posted small gains. Peer from the FTSE 250 Petropavlovsk (LON:POG) advanced 2.3%.
Other mining stocks were in decline.
Silver miner Fresnillo (LON:FRES) lost 1.1%, while platinum producer Lonmin (LON:LMI) declined marginally.
In the FTSE 250, Aquarius Platinum (LON:AQP) was sitting just below the opening level and silver producer Hochschild Mining (LON:HOC) lost 1.2%.
Exploration and development company focused on gold and high value base metals Stratex International (LON:STI) rallied 6%.