* US gold futures down 1.6 pct, down 5 pct on week
* Traders see more losses, could take market to 2010 level
* Fed officials pressure for stimulus end, driving dollar up
* Strong US consumer data, stock market weigh on gold
* Palladium, platinum outperform
(Updates to close of U.S. trading session; adds fresh trader
comments, NEW YORK to dateline, new byline)
By Barani Krishnan and Jan Harvey
NEW YORK/LONDON, May 17 Gold fell for a seventh
straight session on Friday, its longest losing streak in four
years, as the dollar rose to the highest since 2008 after some
Federal Reserve officials said the central bank should end its
stimulus for the U.S. economy.
Investors also rejected gold's safe-haven lure after a May
reading for U.S. consumer sentiment hit a near six-year high,
showing Americans are feeling better about their financial and
Major U.S. stock indexes were on track to close up for a
fourth straight week as the dollar rocketed to a 4-1/2-year high
against the yen.
At 2:30 p.m. EDT (1810 GMT), bullion's spot price was down
1.6 percent, hovering at a four-week low below $1,364 an ounce.
U.S. gold futures for June delivery settled down 1.6
percent at $1,364.70. For the week, it fell more than 5 percent.
Some traders expected the sell-off to not let up until gold
lost between $200 or $300 more per ounce, pushing it back to
levels last seen in the first quarter of 2010.
"With a few more hard losing sessions, we could be down to
between $1,050 and $1,100. It could happen over two weeks or it
could happen in a couple of days if the market plunges $100 a
dip," said Frank McGhee, head precious metals trader at
Integrated Brokerage Services in Chicago.
"There's heavy rotation of money from gold into the stock
market as the U.S. economy keeps getting better and the need for
Fed stimulus gets weaker by the day," McGhee added.
A trio of hawkish regional Federal Reserve officials have
called on the central bank to stop buying mortgage-backed bonds,
citing the recent improvement in the U.S. housing market.
San Francisco Fed chief John Williams, one of the three,
said he expected U.S. stimulus action to ease from this summer.
Richard Fisher, head of the Dallas Fed, meanwhile, said "the
efficacy of continued (bond) purchases is questionable."
Ultra low interest rates and hundreds of billions of dollars
of Fed stimulus money have fueled higher prices for gold and
other commodities over the past 3 years. Despite better U.S.
economic data since the start of this year, Fed Chairman Ben
Bernanke has been reluctant to take his foot off the stimulator
pedal, on grounds the recovery has been fragile.
Exchange-traded products in gold -- investment vehicles that
give investors exposure to bullion through issuing securities
backed by the physical metal -- have seen huge outflows this
The largest, New York's SPDR Gold Trust, reported an
outflow of another 5.7 tonnes on Thursday, bringing the drop in
its holdings this week to more than 10 tonnes.
Physical demand for the metal, which spiked after prices
posted their biggest two-day drop in 30 years in April, showed
signs of softening.
Buying in India, the main consumer of the precious metal,
had fallen significantly from Monday, which saw the celebration
of Akshaya Tritiya, one gold trader in Singapore said.
Platinum group metals were the best performers this week,
with palladium up 5 percent as refiners, recyclers, consumers
and traders attended Platinum Week in London.
Platinum has benefited from concerns about industrial unrest
in major producer South Africa. Miners at South Africa's Anglo
American Platinum reported for work on Friday, a
company spokeswoman said, despite earlier calls for a strike by
some union leaders.
Spot platinum was down 1.7 percent at below $1,454 an
ounce, while spot palladium was flat at $735.50 an ounce.
Silver tracked gold lower, falling nearly 6.5 percent
on the week to $22.29 an ounce. It was down 1.6 percent on the
(Editing by Alison Birrane and Bob Burgdorfer)