June 2, 2014 / 2:50 AM / in 5 years

PRECIOUS-Gold drops in longest losing streak in nearly 7 months

* Gold falls for 5th session, hits fresh 4-month low
    * Asian shares firm on China PMI, Wall Street high
    * Gold to decline to $1,229 -technicals

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, June 2 (Reuters) - Gold slid for a fifth straight
session on Monday in its longest losing streak since November,
and hit a fresh four-month low, hurt by stronger global equities
and weak physical demand in Asia. 
    Spot gold fell to $1,240.69 an ounce, its lowest
since early February, before recovering slightly to $1,243.40 by
0633 GMT. The five-day fall is the metal's longest losing run
since October-November when it dropped for seven straight days. 
    Gold is often seen as an investment-hedge for riskier assets
such as equities. Encouraging China factory data and another
closing record on Wall Street lifted Asian equities and
commodities on Monday. 
    "The technical outlook for gold is not looking very good.
There is a good chance it will fall to $1,230 and then all the
way $1,200," said one trader in Tokyo.
    "Physical markets haven't reacted very much to last week's
drop but if prices fall to $1,200, then we could see some
action."
    Reuters technicals analyst Wang Tao said gold is expected to
fall to support at $1,229 per ounce, a break below which would
lead to a further loss to $1,214. 
    Physical buying failed to pick up as consumer expect gold
prices to fall even further. In top buyer China, banks are also
adequately stocked from last year's record imports, leaving them
to focus on selling existing stocks first. 
    In No.2 consumer India, premiums almost halved last week on
hopes the new government would ease restrictions on imports of
the precious metal. 
    U.S. gold coin sales in May fell slightly from a month
earlier amid lacklustre retail buying interest, U.S. Mint data
showed. 
    Other data also showed that hedge funds and money managers
cut their bullish bets in gold futures and options in the latest
week to their lowest level in nearly four months, another sign
of waning investor interest in the metal amid higher equities.
 
    "With western investors largely absent and the physical
market quiet, it is hard to see what is likely to propel gold
higher, at least near term," HSBC analysts wrote in a note.
    "We do not expect an early or quick gold turnaround, as the
market may not have bottomed yet."   
    Key physical markets in Hong Kong and China were shut on
Monday for a public holiday. 

    PRICES AT 0633 GMT
 Metal            Last     Change   Pct chg
                                            
 Spot gold         1243.4    -7.29     -0.58
 Spot silver        18.69     0.01      0.05
 Spot platinum    1439.65    -5.05     -0.35
 Spot palladium     835.4      2.8      0.34
 Comex gold        1243.6     -2.4     -0.19
 Comex silver       18.71    0.028      0.15
 Euro              1.3629                   
 DXY               80.424                   
                                            
 COMEX gold and silver contracts show the
 most active months
 
 (Reporting by A. Ananthalakshmi; Editing by Michael Perry and
Joseph Radford)
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