Gold dropped for a fifth day in the worst run since February in London, falling to a three-week low, as a stronger dollar curbed demand for an alternative investment and bullion holdings declined. Other precious metals fell.
Holdings in exchange-traded products dropped 6.2 metric tons to 2,219.7 tons yesterday, the lowest since July 2011, according to data compiled by Bloomberg. The U.S. Dollar Index, a measure against six major currencies, reached the highest level since July today. Gold has retreated 16 percent this year, tumbling into a bear market last month, as some investors lost faith in the metal as a store of value and equities rallied.
“The dollar’s strength poses a risk to commodities,” said Feng Liang, an analyst at GF Futures Co. in Guangzhou, a unit of China’s third-biggest listed brokerage. “Sentiment in the gold market is hurt by continued ETF liquidation.”