New York gold futures along with other precious metals ended with steep losses on Friday as heavy selling hit futures across the commodities spectrum on fund liquidation and a slide in oil hit gold, traders said.
Gold, along with other metals, oil and agricultural commodity futures, was sold heavily amid widespread talk that a large fund was liquidating commodity positions as it headed into quarter's end, drawing other sellers into the fray once support levels were crossed, traders said.
"The biggest thing was that crude (oil) was down $2 today and gold's been following if very closely. Also, we came in today and saw some technical levels around $941 being tested to the downside.
Once we traded through support, we started falling very quickly," said one precious metals dealer. Active US gold futures for June delivery on the Comex division of the New York Mercantile Exchange lost 17.50 cents, or 1.83 percent, to $936.50 an ounce by 2:45 pm EDT (1330 GMT), and slid as low as $928.0. It came off a $950.0 high hit in the session. Traders added that many players were selling out of positions to take profits ahead of quarter end.
Spot gold fell more than 2 percent as a drop in oil prices prompted investors to liquidate trading positions before the end of the quarter, traders said. Gold bullion fell as low as $924.0 an ounce, but pulled back up to $931.80/932.60 on Friday at 15:16 EDT (1916 GMT) down from $951.80/852.60 late in New York on Thursday.
Gold was fixed at $934.25 an ounce in London's afternoon. US crude oil futures settled nearly $2 lower as flows resumed from an Iraqi pipeline damaged on Thursday, allaying fears of extended disruptions from Iraq's southern region.
On the New York Mercantile Exchange, crude for May delivery ended a three-day winning streak and settled down $1.96, or 1.82 percent, at $105.62 a barrel.
Widespread talk of a commodity fund liquidating positions kept precious metals under pressure as other sellers unloaded before the quarter ends on Monday.
"There is all sorts of talk going around the desks that a long/short fund got blown out. Apparently they had long positions at higher levels," said one precious metals. A tame inflation reading, improved personal income data and dollar strength on the news also pressured gold, traders said.
The dollar moved higher against the euro after February US personal income rose 0.5 percent, higher than the 0.3 percent rate expected which matched the January rate. The key Core PCE price index within the report showed a tame 0.1 percent gain, in line with market forecasts and down from a 0.3 percent increase in January.
Comex may silver tumbled 61.0 cents to end 3.29 percent lower at $17.94 an ounce. It extended losses to $17.67 during the session, down from the $18.59 high.
Spot silver fell to $17.88/17/93 an ounce, well below $18.50/18.55 at Thursday's close. Silver was fixed in London at $18.36 an ounce. The Nymex platinum contract for July delivery finished with $9.80 declines at $2,048.80 an ounce. Spot platinum fetched $2,000/2,010 an ounce.
Platinum futures are about 14 percent below their $2,308.80 record high reached on March 4. Nymex June palladium ended $5.80, or 1.28 percent, lower at $448.0 an ounce. Spot palladium lost ground by late on Friday to $441/445 an ounce.
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