Friday, May 17, 2013

DJ Gold Falls for Seventh Day as Investors Continue to Shun Bullion

By Francesca Freeman 
Gold prices are on the slide for the seventh consecutive day Friday, marking the metal's longest losing streak in four years.

At 0755 GMT, spot gold was down 0.7% at $1,376.20 a troy ounce in Europe. So far this week, the metal has shed 5% of its value. Gold prices haven't fallen for so many days in a row since 2009.

'All odds are stacked against gold,' said Joyce Liu, an investment analyst at Phillip Futures.

Not only is the stronger U.S. dollar denting dollar-denominated gold's attractiveness to other currency-holders, but the prospect that the U.S. Federal Reserve may cut short its stimulus program is also negative for gold's price prospects, said Ms. Liu. Since gold is traditionally sought as a hedge against currency weakness and inflation at times of high liquidity, central bank stimulus measures tend to boost the metal's appeal to investors.

Gold's technical picture has also deteriorated, following the metal's break below key support at $1,384/oz Thursday, said Ms. Liu. Gold's next technical support level sits at $1,363/oz, she added.

But while many analysts and traders expect gold's downward move to continue, there is some room for a short-lived rally later Friday, as investors seek to cover short positions ahead of the weekend, said a London-based broker.

'With so many people positioned short, we could see some of these positions covered later,' he said.

Still, gold's overall outlook looks gloomy, the broker added.

'It looks like physical demand has been outweighed by negative sentiment, and there is not much holding prices up right now,' he said.

Elsewhere in the precious metals complex Friday, spot silver was down 0.5% at $22.556/oz at 0755 GMT, spot platinum was 0.3% lower at $1,470.75/oz and spot palladium was 0.2% lower at $733.80/oz.

Anglo American Platinum Ltd. (AMS.JO), the world's largest platinum producer by output, said workers reported for their shift as normal Friday despite earlier threats of a strike.
Write to Francesca Freeman at
(END) Dow Jones Newswires

May 17, 2013 04:24 ET (08:24 GMT) 

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