Gold drops further in longest losing streak in nearly 7 months

Mumbai: Gold slid for a fifth straight session on Monday, in its longest losing streak since November, as investor sentiment was hurt by stronger global equities and weak physical demand in Asia.           

Fundamentals    

Spot gold eased 0.3 per cent to $1,247.20 an ounce .It wasn't too far from a 4-month low of $1,241.99 hit on Friday. The 5-day fall is the metal's longest losing streak since October-November when it fell for seven straight days.

Gold is often seen as an investment-hedge to riskier assets such as equities. Global equity markets traded mostly flat on Friday but the Dow and S&P 500 set fresh closing highs. US gold coin sales in May fell slightly from a month earlier amid lacklustre retail buying interest, US Mint data showed, although dealers expect this week's drop in spot prices to spur some bargain hunting by collectors.

Gold premiums in India almost halved last week on hopes the new government would ease restrictions on imports of the precious metal, while demand in the rest of Asia failed to pick up despite a drop in prices.

Hedge funds and money managers cut their bullish bets in gold futures and options in the latest week to their lowest level in nearly four months, according to data from the Commodity Futures Trading Commission on Friday.

The US Mint said it will cease rationing its popular American Eagle silver bullion investment coins, as retail investment demand has waned.     

Market News

The dollar edged up slightly in early Asian trade, while the euro came under pressure as the market braced for further stimulus measures from the European Central Bank this week.