Gold tumbles after Swiss referendum, silver slumps to 5-year low

SINGAPORE, Dec 1 (Reuters): Gold slid 2 per cent on Monday and silver slumped to its lowest since 2009 after Swiss voters overwhelmingly rejected a proposal to boost central bank gold reserves, providing a new trigger for sell-offs in an already nervous market.
The "Save our Swiss gold" initiative, which would have compelled the Swiss National Bank to boost its gold reserves to 20 per cent of its assets from around 8 per cent currently, was rejected by 77 per cent of voters.
Spot gold dropped as far as $1,142.91 an ounce, its lowest since early November when it marked a 4-1/2 year low of $1,131.85. It was down 0.8 per cent at $1,157.20 by 0757 GMT.
Spot silver fell as much as 6.4 per cent to $14.42 an ounce, its weakest since August 2009.
US gold futures declined nearly 3 per cent and silver futures tumbled 9 per cent, before recovering slightly.
"A 'no' was expected but there was probably a risk premium factored in. That's why we are seeing this liquidation today," said a Sydney-based precious metals trader.
He said there were huge stop-loss orders below $15 for silver.
"The move happened in thin market conditions, even before Tokyo opened. The lack of buying interest and the stop-loss orders triggered this big move."
Also weighing on precious metals was the weakness in oil prices, which prompted investors to believe inflationary pressures would soften. Bullion is seen as a hedge against inflation.
US crude fell to a five-year low on Monday, while Brent futures touched a four-year trough, extending a steep decline after OPEC decided not to cut production.
Strength in the dollar and equities also dulled gold's appeal as a hedge.