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PRECIOUS-Gold falls to near 4-month low; posts sharp weekly drop
May 30, 2014 / 10:12 AM / 4 years ago

PRECIOUS-Gold falls to near 4-month low; posts sharp weekly drop

(Adds comment, second dateline, byline, updates market activities)

By Frank Tang and Jan Harvey

NEW YORK/LONDON, May 30 (Reuters) - Gold fell almost 1 percent to a near four-month low on Friday, extending its losing streak a fourth consecutive day, weighed down by book squaring ahead of month end and selling by commodity funds.

For the week, gold lost about 3.5 percent for its worst decline since late November 2013. Heavy technical selling throughout the week sent bullion prices below $1,250 for the first time since Feb. 4.

“It’s the end-of-the-month position clearing,” said COMEX gold options floor trader Jonathan Jossen.

Some hedge funds are forced to sell commodities to raise cash to pay for losses in their bearish bets against the rallying U.S. government bond prices, Jossen added.

Analysts noted a breakdown of gold’s usual inverse correlation with U.S. bond yields. Yields on 10-year U.S. Treasuries fell sharply this week to hit their lowest in 11 months.

Spot gold was down 0.7 percent at $1,247.10 an ounce by 3:22 p.m. EDT (1922 GMT), having earlier hit a low of $1,241.99, its lowest since early February.

U.S. gold futures for August delivery settled down $11.10 an ounce at $1,246.

The yellow metal largely ignored a U.S. government report which showed falling U.S. consumer spending for the first time in a year in April after two months of solid gains, as analysts said the decline is likely temporary given a strengthening jobs market.

Among other precious metals, silver was down 1.3 percent to $18.72 an ounce, while platinum fell 0.5 percent to $1,446 an ounce, and palladium was up 0.3 percent to $833.25. 3:22 PM EDT LAST/ NET PCT LOW HIGH CURRENT

SETTLE CHNG CHNG VOL US Gold AUG 1246.00 -11.10 -0.9 1242.20 1260.60 122,992 US Silver JUL 18.682 -0.332 -1.7 18.615 19.085 39,538 US Plat JUL 1452.70 -7.40 -0.5 1447.70 1469.50 10,269 US Pall SEP 836.35 1.85 0.2 829.30 837.50 3,490 Gold 1247.10 -8.50 -0.7 1242.50 1260.10 Silver 18.720 -0.240 -1.3 18.650 19.100 Platinum 1446.00 -6.60 -0.5 1447.00 1465.50 Palladium 833.25 2.35 0.3 830.50 836.25 TOTAL MARKET VOLUME 30-D ATM VOLATILITY

CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 130,806 176,414 166,962 14.98 0.13 US Silver 44,810 41,675 55,179 20.24 -0.48 US Platinum 11,263 11,068 12,368 18.73 0.03 US Palladium 3,862 9,464 5,820 23.98 -0.25 (Additional reporting by A. Ananthalakshmi in Singapore; Editing by William Hardy and David Goodman)

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