Gold falls in longest losing streak

SINGAPORE. — Gold slid for a fifth straight session yesterday in its longest losing streak since November, hurt by stronger global equities and weak physical demand in Asia.
Spot gold had eased 0,2 percent to $1 247,89/oz, not too far from a four-month low of $1 241,99 hit on Friday.
The five-day fall is the metal’s longest losing run since October-November when it dropped for seven consecutive days. Gold is often seen as an investment hedge for riskier assets such as equities.

Tokyo shares led Asia higher early yesterday, lifted by another closing record on Wall Street and upbeat China data.
“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 analyst Wang Tao said gold was expected to fall to support at $1 229/oz, a break below which would lead to a further loss to $1 214. Physical buying failed to pick up as consumers 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 number-two consumer India, premiums almost halved last week on the hope that the new government would ease restrictions on imports of the precious metal.

US gold coin sales in May fell slightly from a month earlier amid lacklustre retail buying interest, US Mint data showed.
Other data also showed that hedge funds and money managers had 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 yesterday for a public holiday. – Reuters.