Gold prices tumbled on Monday after Swiss voters overwhelmingly rejected proposals to boost gold reserves in a referendum, joining the broad rout in commodities that sent oil prices to five-year lows and copper to four-year lows.
Sinking oil and commodity prices are causing massive realignments in markets, hurting assets tied to the resource sector, from Australian mining shares to the Malaysian ringgit, while benefiting importers such as Japan and China.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.0%, with resource-heavy Australian shares hitting a six-week low.
Gold fell more than two percent at one point to $1,142.90 per ounce, its lowest level in more than three weeks, while silver also took a hit, falling more than 6 % to a five-year low below $14.50 per ounce.
The Swiss measure, had it been approved, would have compelled the Swiss National Bank (SNB) to more than double its gold reserves and banned it from ever selling the metal, threatening its ability to defend a 1.20 euro cap on the Swiss franc imposed at the height of the euro zone crisis.
The Swiss franc dipped to 1.2042 on the euro from 1.2018 at the end of last week, though the Swiss currency is supported by investors who still regard it as one of the safest currencies in the world. It last stood at 1.2036.
"The result should of course temporarily relieve the pressure on the SNB's currency floor, albeit whilst doing little or nothing in our opinion to reverse the fundamental downward trajectory of EUR/CHF," said JPMorgan analyst Paul Meggyesi.
Oil prices hit five-year lows, unable to find a bottom despite their biggest fall in 2 1/2 years last week after OPEC held back from cutting output in the face of a supply glut.
US crude fell more than two percent to a five-year low of $64.10 per barrel, with the fall from June exceeding 40%.
Copper also fell to as low as $6,230.75, piercing below its March low to hit its lowest levels since mid-2010.
The Australian dollar fell more than one percent to a four-year low, of $0.8417, and so did the Malaysian ringgit, which fell to 3.424 to the dollar.
Adding salt to commodities' wounds, Chinese official manufacturing data suggested growth is slowing in China, demand from which has supported commodity prices for years.
Sliding oil and raw material prices have stirred deflation fears in the euro zone and Japan, cementing expectations that the European Central Bank and the Bank of Japan will take more steps to support their respective economies.
The dollar, taking advantage of such concerns, attracted bids against the euro and yen.
The euro was slightly weaker at $1.2437 after having fallen on Friday on data showing annual inflation in the euro zone cooled to five-year lows of 0.3 percent in November.
Many traders expect the ECB may signal further action later this week to ward off deflation. The dollar also hit a seven-year high of 119.03 yen and the dollar index, which measures the greenback against a basket of major currencies, rose to 88.451, a four-year high.
"Given that the Fed is going to raise rates next year, the monetary policy divergence should support the dollar," said Osao Iizuka, the head of FX trading at Sumitomo Mitsui Trust Bank.
The yen's fall and lower commodity prices helped Japanese shares, with the Nikkei rising to seven-year highs. Mainland Chinese shares also gained, with Shanghai Composite Index hitting a three-year high.
