LONDON - Gold prices sank below $1,200 per ounce for the first time in 17 months on Monday, losing out to U.S. Treasuries and a stronger dollar as investors sought refuge from a financial market rout triggered by a crashing Turkish lira. Investors traditionally use gold as a means of preserving the value of their assets during times of political and economic uncertainty and inflation.

But it has this year failed to benefit as investors made a beeline for U.S. Treasuries, seen as the ultimate safe haven, which meant they had to buy dollars.

A higher U.S. currency also makes dollar-denominated assets more expensive for holders of other currencies, which subdues demand - a relationship used by funds to generate buy and sell signals from numerical models.

Spot gold had dropped 0.9 percent to $1,199.36 an ounce by 1406 GMT, having earlier dipped to $1,194.61, its lowest since March 2017.

U.S. gold futures were down 1 percent at $1,206.80.

The lira has tumbled on worries over Turkish President Tayyip Erdogan’s increasing control over the economy and deteriorating relations with the United States.

“Gold is not doing what a lot of investors had hoped it would do,” said Andrew Cole, multi asset manager at Pictet Asset Management, referring to gold losing its safe-haven appeal.

“The longer it doesn’t behave as a risk-off hedge the more likely it is that it won’t.”

Bearish sentiment can be seen in data from U.S. Commodity Futures Trading Commission showing gold speculators added 22,195 contracts to their net short position in the week to Aug. 7, bringing it to 63,282 contracts, the largest since records became publicly available in 2006.

Holdings of the largest gold-backed exchange-traded fund (ETF), New York’s SPDR Gold Trust, at 25.3 million ounces have dropped about 10 percent from their April peak and are at their lowest since Feb 2016.

First resistance in gold is seen at $1,212.50 and then at the overnight high of $1,221.40 while initial support is seen at $1,200.00 and then at $1,190.00, Kitco Metals said in a note.

Meanwhile, platinum prices headed towards the 10-year lows below $800 an ounce seen last month, due to a glut of metal.

Platinum is heavily used in catalysts in diesel vehicles that have fallen out of favour since 2015’s Volkswagen emissions-rigging scandal. The world’s top producer of platinum is South Africa, which saw its rand currency hit a two-year low due to contagion.

“Supply is holding up well as a weaker rand provides support to South Africa’s mining industry,” Julius Baer analyst Carsten Menke said in a recent note, adding this was because it would lower rand-based costs when expressed in dollars.

Platinum fell 2.3 percent to $808 per ounce, silver slipped 0.5 percent to $15.19 and palladium lost 0.7 percent to $903.69.