Gold dropped to a four-week low on Thursday, as renewed liquidation in gold-exchange traded funds and its recent drop below the $1,400-per-ounce level spooked bullion investors, prompting them to favour other assets. Traders said the fall below $1,400 in the previous session triggered heavy selling and that the yellow metal might retest two-year lows of $1,321.35 touched on April 16, when it recorded the worst daily loss for 30 years.
Spot gold was down 0.4 percent at $1,386.05 by 5:28 pm EDT (2128 GMT). US gold for June delivery settled down $9.30 at $1,386.90 an ounce. The largest gold ETF, the SPDR Gold Trust, reported a further 4.5 tonne-drop in its holdings on Wednesday to 1,047.14 tonnes - the lowest since March 2009. In other precious metals, silver edged up 0.4 percent to $22.66 an ounce. Platinum fell 0.5 percent to $1,479 an ounce, while palladium rose 1.6 percent to $736 an ounce.
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