May
18

Gold Drop Further in Longest Losing Streak in Four Years

Precious metal knock down on Friday for a seventh straight session, in its greatest losing streak since March 2009 because the dollar strengthened and investors cut exposure to the gold fearing further drops and choosing equities instead.

Yellow metal has lost almost 6 percent of its value in the six sessions through Thursday as stocks added on the back of strong US economic statistics and on fears the Federal Reserve could end its bullion friendly bond buying program.

Spot gold was losing 0.34 percent at $1,380.91 per ounce by 0538 GMT, having plunge to a four-week low of $1,369.29 on Thursday as renewed liquidation in precious metal’s ETFs and a recent drop below the $1,400 per ounce level spooked investors.

The gold is down 17 percent for the year and is on track for its worst weekly turn down in a month. Holdings in SPDR Gold Trust, the world’s major gold-backed exchange-traded fund, knock down to their lowest in four years.

Traders and dealers said Physical demand was also quiet on Friday as consumers in the largest gold buyers, China and India, wait for prices to stabilize or fall further.

Brian Lan, managing director of GoldSilver Central Pte Ltd in Singapore said many people are waiting on the sidelines as they are expecting another fall.

Demand in India is being hurt by central bank curbs on gold imports. Limits on bank batch have hit supply and triggered a sharp jump in premiums.

Indian gold futures chop down 1.5 percent on Thursday, extending losses for a second straight session to their lowest level in almost a month in line with global markets.  Lan said buying in India had plunge considerably from Monday, which saw the celebration of Akshaya Tritiya, considered an auspicious day to buy metal.

Premiums for gold bars in Hong Kong the main supply of gold for China, strike record highs this week on supply constraints.

Yellow metal demand knock down 13 percent to a three year low of 963 tonnes in the first quarter because rising jewelery demand and strong appetite for coins and bars failed to offset a sharp fall in investment, the World Gold Council says.

SPDR said holdings knock down 0.55 percent to 1041.42 tonnes on Thursday, the weakest in four years.

US gold future for June delivery was down 0.52 percent at $1,379.70 per ounce.

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