PRECIOUS-Gold falls further in longest losing streak in four years

Fri May 17, 2013 1:59am EDT

* Gold's 7-session drop is longest losing streak in 4 years
    * Physical demand slow as consumers await further price
fall-dealers

 (Adds details, updates price)
    By A. Ananthalakshmi
    SINGAPORE, May 17 (Reuters) - 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
U.S. 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. 
    Spot gold is headed towards a low last seen in April, when
fears of European countries liquidating gold reserves sent gold
prices tumbling. 
    SPDR said holdings fell 0.55 percent to 1041.42 tonnes on
Thursday, the lowest in four years. 
    U.S. gold for June delivery was down 0.52 percent at
$1,379.70.
    The dollar held firm near a 10-month high versus a basket of
currencies on Friday while Asian shares were mixed. 
 
  PRECIOUS METALS PRICES 0538 GMT                                                                                                     
  Metal             Last    Change  Pct chg  YTD pct chg  Volume
  Spot Gold        1380.91   -4.78   -0.34    -17.53                                                                                  
  Spot Silver        22.57   -0.09   -0.40    -25.46                                                                                  
  Spot Platinum    1476.75   -2.25   -0.15     -3.79                                                                                  
  Spot Palladium    737.47    1.47   +0.20      6.57                                                                                  
  COMEX GOLD JUN3  1379.70   -7.20   -0.52    -17.67      19136
  COMEX SILVER JUL3  22.56   -0.10   -0.44    -25.37       4579
  Euro/Dollar       1.2863                                                                   
  Dollar/Yen        102.29                                                                                                            
 
 (Reporting by A. Ananthalakshmi; Editing by Lewa Pardomuan and
Clarence Fernandez)
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