The gold price over the past five years.The gold price over the past five years.

Gold has extended its slide, falling to the lowest in more than two years as a record rally in US equities and economic optimism undermine bullion’s safe-haven appeal.

The metal is facing its sixth straight session of losses after the S&P 500 hit a new all-time high and Wall Street rose for four consecutive sessions.

“There is no reason to own gold as long as people keep on putting money into the stock market. You can see it everywhere that the economy is turning around,” said Comex gold options floor trader Jonathan Jossen.

Downward trend:Gold has fallen for five straight sessions. Photo: Phil Carrick

A pause in strong physical demand after news India restricted imports to cut trading deficit also weighed on gold.


Spot gold droped as low as $US1375.25 this evening, its lowest since February 2011 and extending a five-day losing streak.

Accordingly, there was lots of red ink among the local gold mining stocks. Gold miner Newcrest Mining lost 5.3 per cent to eight-year lows, Regis Resources fell 3.4 per cent and Perseus Mining shed 9.5 per cent to four-year lows.

“We’re continuing to see weakness in the materials space,” said Peter Esho, investment adviser at Wilson HTM Investment Group.

“There isn’t too much trust out there. A lot of investors are running a ruler over earnings for the industrial space having no regard at all for the materials space and throwing out the mining stocks throughout that process.”

Analysts expect the fall below the psychologically significant $US1400 level could be a trigger for further heavy selling.

Wednesday’s fifth consecutive daily fall was its longest run of losses since January 2011. It has fallen around

Gold buying in India came to a halt as the country’s central bank restricted imports after a surge in buying in April sent the trade deficit to $US17.8 billion for the month, up more than 72 per cent from March.

India’s gold and silver imports surged 138 per cent on the year in April as customers took advantage of lower prices, increasing pressure on the current account balance and limiting the space for monetary easing.

“With India doing its best through taxation to limit gold buying, the demand from there is not as big as it was the last time we were at these levels,” Marex Spectron head of precious metals David Govett said.