Gold falls further in longest losing streak
Singapore, May 17, 2013
Gold fell on Friday for a seventh straight session, in its longest losing streak since March 2009, as the dollar strengthened and investors cut exposure to the precious metal, fearing further drops and choosing equities instead.
Gold has lost nearly 6 percent of its value in the six sessions through Thursday as stocks gained on the back of strong US economic data, and on fears the Federal Reserve could end its bullion-friendly bond buying program.
Spot gold was down 0.34 percent at $1,380.91 an ounce by 0538 GMT, having fallen to a four-week low of $1,369.29 on Thursday as renewed liquidation in gold ETFs and a recent drop below the $1,400-per-ounce level spooked investors.
The metal is down 17 percent for the year and is on track for its worst weekly decline in a month. Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell to their lowest in four years.
Physical demand was also quiet on Friday as consumers in the biggest gold buyers, India and China, wait for prices to stabilize or drop further, traders and dealers said.
"Many people are waiting on the sidelines as they are expecting another drop," said Brian Lan, managing director of GoldSilver Central Pte Ltd in Singapore.
Demand in India is being hurt by central bank curbs on gold imports. Limits on bank consignments have hit supply and triggered a sharp jump in premiums.
Indian gold futures fell 1.5 percent on Thursday, extending losses for a second straight session to their lowest level in nearly a month, in line with global markets. Lan said buying in India had fallen significantly from Monday, which saw the celebration of Akshaya Tritiya, considered an auspicious day to buy gold.
Premiums quoted in India on gold bars were as high as $5 an ounce, another physical dealer said. Premiums for gold bars in Hong Kong, the main source of gold for China, hit record highs this week on supply constraints.
"Premiums for gold kilo bars have increased quite substantially. In Asia, gold bars are hard to come by," Lan said.
Gold demand fell 13 percent to a three-year low of 963 tonnes in the first quarter, as rising jewellery demand and strong appetite for coins and bars failed to offset a sharp drop in investment, the World Gold Council says. - Reuters