TOKYO (Reuters) - Gold prices fell the most in more than three weeks on Monday after Swiss voters overwhelmingly rejected proposals to boost gold reserves in a referendum.
The measure, had it been approved, would have compelled the Swiss National Bank (SNB) to more than double its gold reserves and banned it from ever selling the metal, threatening its ability to defend a 1.20 euro cap on the Swiss franc imposed at the height of the euro zone crisis.
Gold fell more than two per cent to US$1,142.91 per ounce , its lowest level in more than three weeks, while silver also took a hit, falling more than six per cent to a five-year low of US$14.42 per ounce.
Oil prices hit new four-year lows, unable to find a bottom despite their biggest fall in 2 1/2 years last week after OPEC resisted cuts to output in the face of a supply glut.
U.S. crude fell more than two per cent to a four-year low US$64.62 per barrel after a 13.5 per cent last week. That marked a 40 per cent decline from their peak in June.
Sliding oil prices have stirred deflation fears in the euro zone and Japan, cementing expectations that the European Central Bank and the Bank of Japan will take more steps to support their respective economies.
The US dollar, taking advantage of such concerns, attracted bids against the euro and yen.
The euro was slightly weaker atUS $1.2441 after having fallen on Friday on data showing annual inflation in the euro zone cooled to five-year lows of 0.3 percent in November.
Many traders expect the ECB may signal further action to ward off deflation later this week.
The dollar also gained 0.2 per cent in early trade to 118.81 yen, coming within sight of testing its seven-year high of 118.98 set on Nov. 20.
The dollar index, which measures the greenback against a basket of major currencies, rose to 88.316, near four-year highs of 88.44 set on Monday last week.
In Asia, falls in energy and raw material prices look set to hurt assets that are tied to the resource sector, including from Australian mining shares to the Malaysian ringgit.
But Tokyo shares hit a new seven-year high benefitting from both the fall in the yen and oil, with the Nikkei up 0.47 per cent at the open.