Gold fell to a two-week low on Wednesday after its biggest one-day drop in four weeks, as expectations that Britain will vote to remain in the European Union reduced risk aversion and lent a firmer tone to stocks.
The metal fell nearly 2 percent on Tuesday after two opinion polls suggested it was likely that voters would opt on Thursday to stay in the EU. Concerns over a possible vote in favor of leaving had sent gold to a near two-year high last week.
"Gold seems to have fully discounted and is anticipating that it will be a 'no' vote. That seems to be the driving force," said Bill O'Neill, co-founder of commodities investment firm Logic Advisors.
"I don't think gold will go down much if the 'no' vote prevails. I do think it will go up significantly if we do get a 'yes' vote."
Spot gold hit a two-week low of $1,261.01 an ounce and was down 0.29 percent at $1,265.10 an ounce , little changed from late on Tuesday. U.S. gold futures for August delivery settled down 0.2 percent at $1,270 an ounce.