Brexit campaign loses steam, Gold falls more than 1 pc

Gold fell on Monday after polls showed the campaign for Britain to remain in the European Union regaining some momentum, sharpening appetite for assets seen as higher risk and sparking a sharp rally in stocks.

Speculation that British voters could opt to leave the trading bloc in a referendum on Thursday helped push gold to its highest in nearly two years last week, and to three-year peaks in euro and sterling terms.

However, three opinion polls ahead of Thursday's vote showed the 'Remain' camp recovering some momentum, although the overall picture remained one of an evenly split electorate. That helped pull gold back from those highs.

Spot gold fell to a low of $1,280.15 an ounce in early trade, and was at $1,283.50 an ounce at 0931 GMT, down 1.1 percent. U.S. gold futures for August delivery were down $8.20 an ounce at $1,286.60.

"There have been adjustments in expectations for a potential Brexit," Capital Economics analyst Simona Gambarini said. "We had a few days at the beginning of last week when the odds of a 'Leave' vote were getting higher than a 'Remain' vote, which prompted a sharp rally in the gold price."

"Now we're in a situation where we're getting a little bit more even, so you see a bit of steam coming out of the gold price," she said. "We may see some more volatility, according to which side prevails."

Two weekend polls showed "In" retaking the lead and another showed the "Out" campaign's lead narrowing. Bookmakers' odds have shown those wishing to stay in the EU ahead and Betfair put the implied probability of a vote to "Remain" at 72 percent on Monday, up from 60-67 percent on Friday.

Global stocks rallied and sterling strengthened broadly while safe havens including the yen retreated.

"The referendum will doubtless be the dominant theme this week," Commerzbank said in a note. "The uncertainty over the outcome of the vote should lend support to gold."

There was some optimism for bullion as holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Shares, rose 0.59 percent to 907.88 tonnes on Friday, the highest since September 2013.

Hedge funds and money managers took their bullish stance in gold to the highest in nearly five years in the week to June 14, U.S. government data showed on Friday.

Among other precious metals, silver was down 0.7 percent at $17.35 and platinum was 0.5 percent higher at $972.76. Palladium, which touched its lowest since May 25 on Friday, was up 1.7 percent at $539.44.