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(Bloomberg) — Gold futures extended declines into a ninth day for the longest slump since the collapse of Lehman Brothers Holdings Inc. as holdings in the largest exchange-traded product backed by bullion tumbled to the lowest in almost seven years.
Futures for August delivery on the Comex in New York fell as much as 1 percent to $1,095.90 an ounce and traded at $1,102.90 at 9:21 a.m. in Singapore. A ninth day of losses would be the longest streak since Sept. 11, 2008, four days before Lehman filed for bankruptcy. Futures sank to $1,080 on Monday, the lowest price since February 2010.

The Federal Reserve is moving closer to raising borrowing costs this year as the U.S. economy improves, strengthening the dollar and eroding demand for gold, which generally offers returns only through price gains. Assets in the SPDR Gold Trust dropped on Monday to the lowest level since Sept. 19, 2008, while money managers are holding the smallest net-bullish bet on gold since the U.S. government data began in 2006.

“The general background to gold declines has been strength in the U.S. dollar, heightened expectations for Fed rate hikes, a reduction in emerging-market physical demand, sector-wide weakness in other commodities, disappointed investor long liquidation, and increased momentum selling,” HSBC Holdings Plc analysts including James Steel wrote in an e-mailed note.
Gold plunged by the most in two years during a stretch of about 15 minutes in Asian trading hours Monday, triggering losses in other commodities and related equities. The Bloomberg Commodities Index sank to a 13-year low as oil to copper tumbled. Newcrest Mining Ltd., Australia’s biggest producer, slumped 3.8 percent Tuesday, extending a 10 percent drop a day earlier in Sydney.

Spot gold traded at $1,100.35 an ounce from $1,096.50 Monday, when the metal slid to the lowest level since March 2010, according to Bloomberg generic pricing.

Spot silver traded at $14.7436 an ounce from $14.7055, after declining Monday to the lowest level this year. Platinum retreated 0.3 percent to $975.22 an ounce after dropping to the lowest since 2009 on Monday, set for a sixth day of losses that’s the longest run since March. Palladium fell 0.2 percent to $605.03 an ounce.

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 James Poole