Gold fell for the fifth straight session on Wednesday, hitting a three-week low as the dollar strengthened to a six-week high versus the euro after weak euro zone data. Also Read: Gold prices jumps 500% in 7 years, what next? While gold has recovered around 7 percent from a two-year trough of USD 1.321.35 an ounce hit in mid-April, its safe-haven appeal has been battered by record-high US equities and signs of an improving US economy. Spot gold fell 0.8 percent to USD 1,414.56 an ounce at 1000 GMT, having touched its lowest since April 23 at USD 1,408.19 earlier. Bullion was on track to post a daily fall for a fifth consecutive session, its longest run of losses since January 2011. It has fallen more than 14 percent so far in 2013 after gaining for the past 12 years. US gold futures for June fell 0.8 percent to USD 1,413.70 an ounce. "The dollar is very robust and seems poised for more strength in the coming months, adding further pressure to technically weak gold prices," VTB Capital analyst Andrey Kryuchenkov said. The dollar rose to a six-week high against the euro after surprisingly weak first-quarter economic growth numbers from Germany and France, while European shares were mixed, taking a breather from a sharp rally. While a weak European growth outlook lifts the chance of another interest rate cut by the European Central Bank, the US economy showing signs of a recovery underpins expectations that the Federal Reserve may wind down its asset purchases programme by the end of the year, analysts said. "The US economy is not out of the woods yet but is so much better than anywhere else and monetary expansion should continue in Europe for longer than in the United States," Kryuchenkov said. As a gauge of investor sentiment, holdings at SPDR Gold Trust, the largest gold-backed ETF, were unchanged at 33.8 million ounces on Tuesday, but still within sight of their lowest since March 2009 hit earlier. INDIA RESTRICTS GOLD IMPORTS Gold buying in India came to a halt as the country's central bank restricted imports after a surge in buying in April sent the trade deficit to USD 17.8 billion for the month, up more than 72 percent from March. India's gold and silver imports surged 138 percent on year in April as customers took advantage of lower prices, increasing pressure on the current account balance and limiting the space for monetary easing, even though inflation slowed in the month. "With India doing its best through taxation to limit gold buying, the demand from there is not as big as it was the last time we were at these levels," Marex Spectron head of precious metals David Govett said. "As the market becomes somewhat accustomed to these lower prices, the physical demand slackens and waits once again for dips. I wouldn't be surprised if we see USD 1,400 tested before long." In other precious metals, silver fell 1.5 percent to USD 23.02 an ounce, platinum was down 0.3 percent to USD 1,491.99 an ounce and palladium dropped 0.9 percent to USD 720.25 an ounce.

Source