Gold prices fell to an eight-week low on reduced investment demand.
Hedge-fund managers and other large speculators trimmed their net-long positions, or bets on a rally in Comex gold futures, by 2 per cent to 204,921 contracts in the week ended July 13, according to government data. That marked the lowest level since April 6. The metal has dropped 6.7 per cent from a record $US1266.50 an ounce on June 21.
"There is no fundamental demand for gold," said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois. "Gold is a crowded trade, and as soon as investors start selling, there is nobody to buy it."
Gold futures for August delivery fell $US6.30, or 0.5 per cent, to $US1181.90 on the Comex in New York. Earlier, the price touched $US1176.90, the lowest level for a most-active contract since May 24.
"Price direction is probably down for this week, and gold will spend more time around the $US1180 and $US1190 levels," said Robin Bhar, a metals analyst at Credit Agricole CIB in London. "Prices looked overbought, and everybody was very long."
The decline may accelerate should the price settle below the 100-day moving average, Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland, said before the market closed.
The moving average is $US1177.58. The metal has gained 7.8 per cent this year.
Silver futures for September delivery dropped 24.5 US cents, or 1.4 per cent, to $US17.543 an ounce.
Platinum futures for October delivery rose $US1 to $US1513.10 an ounce on the New York Mercantile Exchange.
Palladium futures for September delivery fell $US4.70, or 1 per cent, to $US443.90 an ounce.