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* Gold falls 1.5 pct to 1-mth low of $1,338.95
* Silver falls to lowest since September 2010
* Investor sells big chunk of silver holdings-trader
By A. Ananthalakshmi
SINGAPORE, May 20 (Reuters) - Gold fell for an eighth
straight session on Monday to its weakest level in over a month,
as fears that the U.S. Federal Reserve may wind back its
economic stimulus programme hurt the metal's appeal as a hedge
against inflation.
Investors have been dumping gold, which is down 20 percent
so far this year, as stocks and the dollar continue to
outperform. If gold closes in the red on Monday, it would match
the metal's longest losing streak since March 2009.
"Investors are very bearish at the moment," said Yuichi
Ikemizu, branch manager for Standard Bank in Tokyo. "The stock
market and the dollar are quite strong. It's a natural move for
investors to switch their money from commodities to equities."
Data showed Americans felt better about their economic and
financial prospects in early May, with consumer sentiment at its
highest in nearly six years, while a gauge of future economic
activity rose in April to a near five-year high.
Spot gold hit a session low of $1,338.95 an ounce,
its lowest since touching a two-year trough of $1,321.35 during
the April 16 sell-off that was prompted by worries that European
countries could liquidate gold reserves.
"Coin and jewelry buyers do not seem to be stepping in as
aggressively as they were last month when gold underwent its
initial $200 an ounce swoon," said Edward Meir, a metals analyst
at futures brokerage INTL FCStone.
By 0637 GMT, gold was down 1 percent at $1,345.44.
Silver, which has fallen 30 percent in 2013, was down
4 percent at $21.39 an ounce after touching $20.84 at one point
- its lowest since September 2010.
The slide came after an unidentified investor sold off a big
chunk of silver holdings on Monday morning, Ikemizu said.
The gold-silver ratio is at its highest level since
September 2010 with an ounce of gold currently buying 63 ounces
of silver. That is twice as much as in April 2011, when silver
was trading considerably higher.
U.S. gold futures fell as much as 2 percent, while
silver futures dropped as much as 9 percent.
Hedge funds and other big speculators in commodities have
started selling gold in a big way, trade data showed on Friday,
just a month after they supported the precious metal amid a
record tumble in its price.
Money managers, including hedge funds, pulled $1.4 billion
from the U.S. gold futures market for the week ended May 14 by
trimming their net long positions in the metal, according to
Reuters calculations of data released by the Commodity Futures
Trading Commission.
Holdings in SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, fell 0.29 percent to 1038.41
tonnes on Friday from 1041.42 tonnes on Thursday, their lowest
in four years.
Meanwhile, gold traders and jewellers in India, the world's
biggest buyer of the metal, were scrambling for supplies after
the central bank restricted imports on a consignment basis,
triggering a surge in premiums.
PRECIOUS METALS PRICES 0637 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1345.44 -13.26 -0.98 -19.65
Spot Silver 21.39 -0.84 -3.78 -29.36
Spot Platinum 1446.49 -3.51 -0.24 -5.77
Spot Palladium 732.22 -3.53 -0.48 5.81
COMEX GOLD JUN3 1344.10 -20.60 -1.51 -19.79 53399
COMEX SILVER JUL3 21.38 -0.98 -4.37 -29.29 19538
Euro/Dollar 1.2847
Dollar/Yen 102.66
COMEX gold and silver contracts show the most active months
(Reporting by A. Ananthalakshmi and Manolo Serapio Jr.; Editing
by Joseph Radford and Richard Pullin)
