Gold Extends Longest Losing Streak in Four Years as Silver Sinks

Gold extended the longest slump in four years as investment holdings contracted, while silver plunged to the lowest level since September 2010 to send the ratio between the two metals to the highest in 33 months.

Gold for immediate delivery lost as much as 1.5 percent to $1,338.85 an ounce, the lowest price since April 18, and was at $1,347.23 at 9:25 a.m. in Singapore. Prices are down for the eighth straight session, the longest decline since March 2009. Cash silver tumbled as much as 7 percent to $20.6985 an ounce, before trading at $21.4775. The gold-silver ratio climbed to 64.89, the highest level since August 2010.

Gold tumbled into a bear market last month as the U.S. economy improved, hurting the metal’s appeal as a haven while boosting the dollar and equities. Holdings in exchange-traded products have declined every week since February and assets are down 16 percent this year. Hedge funds and other large speculators held a record bet on lower prices on May 14, data from the U.S. Commodity Futures Trading Commission show.

Cash bullion sank 1.9 percent on May 17 as the Dollar Index (DXY) advanced to the highest level since July 2010 and U.S. equities surged to records. U.S. data last week showed that consumer sentiment and an index of leading indicators topped estimates, while Federal Reserve Bank of San Francisco President John Williams said the U.S. central bank may begin to reduce monthly bond purchases as early as the third quarter.

(Source: Bloomberg)