Gold fell to a two-and-a-half-week low in choppy and thin holiday trade on Monday, hurt by sharp outflows from the world’s biggest bullion-backed exchange-traded fund (ETF) and a stronger dollar.
The metal was also impacted by a spurt of technical selling after it was unable to hold on to the $1,300-an-ounce level hit early in the trading session. Spot gold fell to a two-and-a-half-week low of $1,281.40, before pruning the losses to trade down 0.7 percent at $1,284.
Gold Trust, the world’s top gold ETF and a good measure of investor sentiment, saw outflows of 9.3 tonnes last week. Before last week, the fund – closely watched due to the size of its holdings – had gained 6.2 tonnes from the beginning of 2014. Last year, huge outflows from the fund were partly responsible for the 28 percent drop in gold’s price. Investors shifted money to better-performing equities as the U.S. Federal Reserve began to unwind its monetary stimulus.