London - Gold hit a six-week low on Thursday, breaking below $1,300 an ounce for the first time since mid-February, as speculation that US rates would rise sooner than expected and easing tensions over Ukraine pushed prices through key chart levels.
Selling accelerated as the metal broke through psychological support at $1,300 an ounce, traders said, and its 200-day moving average at $1,296 an ounce.
That look prices to their lowest since February 13 at $1,291.36 an ounce.
Spot gold was down 0.7 percent at $1,294.30 an ounce, a drop of around 3 percent so far this week.
US gold futures for April delivery were down $8.40 an ounce at $1,295.00.
“Stops (were) triggered below 1300,” VTB Capital analyst Andrey Kryuchenkov said.
“There's been some continuous speculative profit-taking as bullion remains under pressure from easing geopolitical tension and long liquidation after the early 2014 uptrend broke. The Fed's regular policy statement last week has taken some shine off the yellow metal.”
He added, “With little physical support here, gold remains weak. Now all eyes are on non-farms and the ECB next week.”
US non-farm payrolls data, due next Friday, are seen as a major barometer of US economic strength.
Wednesday's firm US durable goods data supported expectations that the world's biggest economy was on the road to recovery.
Traders are watching data for clues as to when US monetary policy will normalise.
Federal Reserve Chair Janet Yellen said last week that rates could start rising early next year, raising the opportunity cost of holding non-yielding bullion.
The metal is also losing support from the stand-off between Russia and the West over Ukraine, with European stocks well off the five-week lows they hit earlier this month on growing tension over Russia's annexation of Crimea.
DEMAND FOR PHYSICAL GOLD SOFT
Traders reported little interest from buyers of physical gold, who tend to return to the market strongly when prices fall, overnight in Asia. Prices around the $1,225-1,250 region may be needed to tempt buyers in major consumer China, they say.
“Physical demand remains far below levels that indicate this community considers current prices attractive,” UBS said in a note on Thursday.
“This suggests that gold needs to descend further before it finds its price floor.”
Holdings in the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust fell 1.8 tonnes to 816.97 tonnes on Wednesday, after declining 2.70 tonnes in the previous session.
That has cut its net inflow for the year to 18.8 tonnes.
Among other precious metals, silver was down 0.2 percent at $19.64 an ounce.
The gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, retreated to 65.9 on Thursday from the previous session's 7-1/2 month high at 66.2 as gold underperformed.
“There is support at 65.02, the 76.4 percent retracement of the last downtrend in the ratio from 67.47 high to 57.09 low,” technical analysts at ScotiaMocatta said in a note.
“Uptrend support comes in at 62.99. We are bullish the ratio, targeting a test of the double top in the 67.50 area.”
Spot platinum was down 0.2 percent at $1,398.25 an ounce, while spot palladium was down 1.7 percent at $764 an ounce.
The striking Association of Mineworkers and Construction Union (AMCU) is due to march to Impala Platinum's offices on Thursday. Impala is one of three mining companies, along with Lonmin and Anglo American Platinum hit by industrial action.
South Africa's government mediator met with AMCU on Wednesday to restart talks aimed at ending a crippling platinum strike now entering its tenth week. - Reuters