According to Reuters, May 16, on Thursday gold fell for six straight sessions, hitting its lowest level in four weeks, due to the strength of the USD and uninterested investor sentiment.
However stocks are rallying which also affected bullion’s demand as an alternative investment this year, also led funds to mostly liquidate their gold positions. Gold dropped about 1.6% to a low of $1,369.29 an ounce in earlier trade. Gold cut some losses but remained down 1.2% at $1,375.46 around 1118 GMT.
June U.S. gold delivery decreased 1.5% at $1,374.30 an ounce, taking hit a low of $1,368.
The drop under the psychologically significant $1,400 level in the previous session led to heavy selling and that the yellow metal may re-test two year lows of $1,321.35 hit on April 16, when it recorded the supreme daily loss for 30 years, traders said.
The six straight daily drops for bullion would be its biggest loss since March 2009. Gold had dropped around 16% in 2013.
Mitsubishi analyst Jonathan Butler Stated “It is possible that we will see further selling. This fall is reminiscent of what we saw about a month ago during a sort of flash crash in gold,”
The USD was close to a six-week high versus the euro and topped against the yen on predictions for more monetary easing in the euro zone and cheap asset buying in the United States, which would weaken the dispute for holding gold as a hedge against inflation. The strong USD makes dollar-denominated commodities extra expensive for holders of other currencies.
U.S. data shows, the market’s attention is currently heading towards the U.S. inflation data, later in the day, in addition to the country’s weekly jobless claims.
The World Gold Council said on Thursday. Gold investment nearly went halves on in the first quarter as a positive sight of the U.S. economy prompted investors in the West to be interested in assets such as stocks over bullion.
A SEC filing showed Soros Fund Management LLC joined funds including Northern Trust and Blackrock in lowering its investment in the SPDR Gold Trust, the world’s largest gold-backed ETF, in the first three months of the year.
On Wednesday, holdings in the SPDR fund dropped 0.43% to reach 1,047.14 tons, the lowest since March 2009.
Yet, the lower gold prices in China have appealed physical buying. On Thursday, the world’s second-largest consumer after India bought a big amount of gold.