Gold Falls, Heads for Longest Slide Since 2006 as Euro Plunges

By Pham-Duy Nguyen

Aug. 8 (Bloomberg) -- Gold fell for the sixth straight session, the longest losing streak since June 2006, as the euro plunged against the dollar, eroding the appeal of the precious metal as an alternative investment. Silver also declined.

The euro fell the most in four years against the dollar on speculation a slowing economy will prevent the European Central Bank from raising interest rates. Gold generally moves in tandem with the euro as an alternative to the dollar. The metal reached a record $1,033.90 an ounce in March as the euro headed for an all-time high.

``This is a rout,'' said Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois. ``All those people who were bearish the dollar and bullish gold are getting their heads handed to them.''

Gold futures for December delivery fell $11.10, or 1.3 percent, to $866.80 an ounce at 9:01 a.m. on the Comex division of the New York Mercantile Exchange. A close at that price would leave gold down 6.1 percent since July 31. The last time the metal plunged six straight sessions was June 6 to June 14, 2006, when the price dropped 13 percent.

Silver futures for September delivery fell 49.7 cents, or 3.1 percent, to $15.76 an ounce on the Comex. Before today, silver gained 9 percent this year, while gold advanced 4.8 percent.

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.