Nine in a row could mean the lengthiest gold drop since ’98

(Bloomberg) — Gold traded near a three-month low after posting eight straight declines as the surging dollar cut demand for the precious metal. A ninth drop on Thursday would be the longest losing run in 17 years.

Bullion for immediate delivery lost as much as 0.4 percent to $1,150.62 an ounce and was at $1,152.03 at 9:44 a.m. in Singapore, according to Bloomberg generic pricing. Prices declined to $1,147.72 on Wednesday, the lowest level since Dec. 1 as the U.S. currency climbed, and another daily fall would complete the longest run of losses since January 1998.

The Bloomberg Dollar Spot Index is headed for the biggest quarterly advance since 2008 amid speculation that the Federal Reserve is getting closer to raising rates as the largest economy recovers. The currency’s rise to a decade-high this week followed a report on Friday that showed U.S. employers added more workers than expected last month. Investors cut holdings in gold-backed exchange-traded funds for a 10th day on Tuesday.

“When we saw the strong jobs number, and certainly that it was above consensus, the dollar just went crazy and that really let go on the gold price,” David Lennox, a resource analyst at Fat Prophets in Sydney. “The market is saying that it’s now seen two very strong, well-above consensus results and maybe interest rates are back on again.”

Policy makers are better off tightening earlier and more gradually than later and more quickly, Fed Bank of Dallas President Richard Fisher said on Monday. The Federal Open Market Committee is scheduled to meet next week.

Raise Rates

With the U.S. central bank indicating it will raise rates for the first time since 2006, bullion will post its third annual drop this year, according to Artur Passos, who produces the metals outlook at Itau Unibanco Holding SA, Latin America’s biggest bank by market value. Passos, part of a group led by former central banker Ilan Goldfajn, was the most-accurate among 20 forecasters, data compiled by Bloomberg Rankings show.

An improving U.S. economy erodes the appeal of gold as a haven and sends investors to assets with better yield prospects such as bonds and equities. February marked the 12th month U.S. payrolls have increased by at least 200,000, the best run since a 19-month stretch that ended in March 1995.

Spot gold’s 14-day relative strength index held below the level of 30 on Thursday for a fifth day, indicating to some investors who study charts that prices may be poised to rebound.

Bullion for April delivery was at $1,151.20 on the Comex from $1,150.60 on Wednesday, when the price fell to a three- month low. Most-active prices are 2.8 percent lower in 2015, after a 1.5 percent loss last year and 28 percent slump in 2013.

Silver for immediate delivery fell 0.4 percent to $15.4463 an ounce after dropping on Wednesday to $15.2977, the lowest since Dec. 1. The metal is headed for a ninth daily loss, the longest run since 2008.

Spot platinum advanced 0.1 percent to $1,121 an ounce, rebounding from $1,114.05 on Wednesday, the lowest since 2009. Palladium increased 0.3 percent to $791.63 an ounce.