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(Bloomberg) — Gold retreated for a 10th day in New York, headed for the longest losing streak since 1996 as Goldman Sachs Group Inc. predicted further declines.

Futures for August delivery fell as much as 0.9 percent to $1,093.90 an ounce. Prices could fall below $1,000 for the first time since 2009, Jeffrey Currie, Goldman’s New York-based head of commodities research, in a telephone interview on Tuesday. ABN Amro Bank NV’s Georgette Boele and Robin Bhar of Societe Generale AG are also bearish on bullion.
The rout is being driven by speculation that the U.S. will raise interest rates this year, diminishing the appeal of the metal, which typically offers returns only through price gains. China’s disclosure of gold holdings that were less than what analysts were expecting and a strengthening dollar have also limited increases in bullion.

Gold futures on the Comex traded 0.7 percent lower at $1,095.40 at 10:34 a.m. Singapore time. A 10th day of declines would be the longest such run since Sept. 13, 1996. Prices sank to a five-year low of $1,080 on Monday.

“Prices appear to be stabilizing and may consolidate before the Federal Reserve meets next week,” Citic Futures Co. strategists including Hou Jun wrote in an e-mail. “Expectations of higher U.S. interest rates will continue to weigh on gold.”
Federal Reserve Chair Janet Yellen told lawmakers last week that she expects officials to raise borrowing costs this year. The U.S. central bank meets July 28-29.

Gold plunged by the most in two years during a stretch of about 15 minutes in Asian trading hours Monday. Three days earlier, holdings in exchange-traded products backed by bullion contracted 15.67 metric tons, the biggest one-day withdrawal since July 2013.

Gold Coins

Still, prices near the lowest level in more than five years may spur purchases. Sales of American Eagle gold coins reached 111,000 ounces in July, already the highest for a month since April 2013, when prices tumbled into a bear market.
“Although the physical markets have not responded vigorously to gold’s recent price decline, we do not think this necessarily means that physical demand is bound to remain weak,” HSBC Holdings Plc analysts James Steel and Howard Wen said in a report.

Gold for immediate delivery traded 0.5 percent lower at $1,096.27 an ounce from $1,101.25 Tuesday, when prices rose 0.4 percent. The metal slid to $1.086.18 Monday, the lowest level since March 2010, according to Bloomberg generic pricing.
Spot silver declined 0.5 percent to $14.7687 an ounce after climbing 1 percent Tuesday. Platinum dropped 0.8 percent to $970.23 an ounce, while palladium slid 0.6 percent to $623.65 an ounce after rallying 3.5 percent in the previous session.

To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editors responsible for this story: Pratish Narayanan at pnarayanan9@bloomberg.net Jake Lloyd-Smith