Gold see worst slump since March 2009 as holdings cuts

LONDON: Gold today fell for a seventh day in the worst slump since March 2009 as exchange-traded product holdings shrank.

A strong dollar and a US Federal Reserve policy maker said that stimulus may be reduced within months, further influenced trading in dollar-priced gold.

Gold fell 0.7 per cent to 1,376.69 dollar an ounce. Prices reached 1,369.85 dollar yesterday, the lowest since April 18, and are down 4.9 per cent this week.

Silver also fell 0.9 per cent to 22.48 dollar an ounce, set for a 5.8 per cent weekly slide.

Gold slid 18 per cent this year, falling into a bear market in mid-April, as some investors lost faith in the metal as a store of value and equities rallied on mounting confidence the US economy is improving.

The dollar traded near the highest level since July versus six major currencies as Fed Bank of San Francisco President John Williams said the central bank may begin to taper off monthly bond purchases as early as this summer. Gold ETP assets fell every week since February.

Holdings in exchange-traded products dropped 7.1 metric tons to 2,207.1 tons, the lowest since July 2011. Assets slipped 16 per cent this year.

Filings showed Soros Fund Management and BlackRock were among funds that cut stakes in SPDR Gold Trust, the biggest gold ETP, in the first quarter.