The gold price has reversed sharply lower today after making gains earlier in the session on the back of a failed referendum in Italy that threw the Eurozone into chaos.

 At 7.35pm (GMT) gold was trading at $1,171 falling as low as $1,157 earlier in the trading session.

Italian Prime Minister Matteo Renzi’s plan to call a referendum backfired when it was overwhelmingly defeated causing investors to initially run for safe haven assets such as gold.

Mr Renzi immediately resigned and fears have now grown that Italy is headed for a period of instability which may spread throughout the entire Eurozone.

The bounce in the gold price however was short lived as investors refocused on other matters such as a near certain rate hike from the US Federal reserve this month,

 “Despite the short-term advance the rest of the factors arrayed against gold look bearish,” INTL FCStone analyst Edward Meir said.

“The precious metal will struggle against a soaring dollar, rising interest rates and buoyant US equity markets. On the rate count, the December move by the Fed is largely a foregone conclusion, but gold bugs have to be concerned about future moves that could come along at a faster clip,” he added.

William Dudley, the president of Federal Reserve Bank of New York and vice-chairman of the Federal Open Market Committee also weighed into the interest rate scenario today and said in an interview ,

“There is still considerable uncertainty about how fiscal policy will evolve over the next few years. At this juncture, it is premature to reach firm conclusions.” He also added that the market is expecting more and faster rate hikes under a Trump presidency than Obama.

Higher interest rates are negative for gold as the precious metal is not an interest bearing asset.