According to Reuters, on May 17, after comments from a Federal Reserve official that the bank may soon leash in monetary easing lifted the USD, gold dropped for seven straight sessions on Friday, its longest losing streak in four years.
after San Francisco Fed chief John Williams said the U.S. central bank could begin easing up on stimulus this summer, the USD moved towards a 10-month high against other main currencies.
On Thursday, that stunted a brief rally seen in gold prices late after a set of U.S. data, put gold on track to drop 5% this week, its biggest weekly drop in four years.
Spot gold decreased by 6% to reach $1,376.85 an ounce at 11:55 GMT, while June U.S. gold futures delivery also declined $11.30 an ounce at $1,375.60.
Sharps Pixley chief executive Ross Norman stated “In the main, the current price weakness is to be attributed to strength in the dollar and massive selling in exchange-traded funds,” and added “We’ve had some poor data out of the United States, yet the dollar still continues to rise. Clearly a correction in the U.S. dollar would be massively supportive for gold.”
ETFs, the popular investment vehicles that give investors experience to the gold price through issuing securities supported by physical metal, have experienced huge losses this year.
New York’s SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, reported on Thursday, a loss of another 5.7 tons, bringing the descent in its holdings this week to more than 10 tons.
Gold physical demand, which showed a raise after prices posted their biggest two-day drop in 30 years in April, showed signs of moderating.
Gold price in India, the main consumer of the yellow metal, one gold trader in Singapore said it had dropped significantly from Monday, which saw the celebration of Akshaya Tritiya, considered an auspicious day to buy gold.