By Jan Harvey
Gold fell 1 percent on Tuesday as buyers cashed in gains from the metal's biggest two-day rally since late 2008, made in the wake of Britain's shock vote to quit the European Union last week.
The metal jumped to its highest in more than two years at $1,358.20 an ounce on Friday after the referendum on EU membership, and to more than three-year highs in euro and sterling terms. It quickly retreated from that peak, however.
Spot gold was down 0.9 percent at $1,311.93 an ounce at 0930 GMT, while U.S. gold futures for August delivery were down $9.20 an ounce at $1,315.50.
Losses in the wider markets reversed on Tuesday, with European shares up 2.3 percent after a three-day fall on hopes of a more co-ordinated central bank response to financial market losses. [MKTS/GLOB]
"Equities are showing some signs of stabilization, and gold is really a mirror image of what the equity markets are doing," Julius Baer analyst Carsten Menke said. "But clearly there is a lot of uncertainty in the market so I would not expect gold to move quickly below $1,300."
"If we have news that there is stress in the financial system, which might make people think we are moving into a Lehman-like moment, that could trigger...