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London - Gold fell more than 1% on Friday to head for its first weekly drop in four on the back of sharply lower oil prices and dollar strength, though traders remained cautious ahead of a referendum on 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 prices remain near four-year lows.
Spot gold was down 0.8% at $1,180.89 an ounce at 14:12 GMT, having earlier touched a low of $1 177.84. US gold futures for December delivery were down $18.70 an ounce at $1 183.50.
"(Gold's weakness) has to do with the oil price, and strength in the dollar," ABN Amro analyst Georgette Boele said.
"Weakness in oil prices isn't good for gold, because inflation expectations are adjusted downwards... 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% of its forex reserves, repatriate its bullion, and undertake never to sell it.
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.
India has decided to scrap the rule that required trading companies to export 20% of gold imported, known as the 80:20 scheme, local television channels reported on Friday, citing unnamed government sources.
Silver was down 2.3% at $15.80 an ounce, while spot platinum was down 0.5% at $1 205.50 an ounce and spot palladium was up 0.1% at $804.98 an ounce.
