Gold fell for a seventh straight session early 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 US economy. At 2:30 pm EDT (1810 GMT), bullion's spot price was down 1.6 percent, hovering at a four-week low below $1,364 an ounce.
US 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. 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 US housing market.
San Francisco Fed chief John Williams, one of the three, said he expected US stimulus action to ease from this summer. Richard Fisher, head of the Dallas Fed, meanwhile, said "the efficacy of continued (bond) purchases is questionable." 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 year.
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.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 day.
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