Gold prices shed more than 2 percent on Wednesday as the dollar gained ground against the euro, prompting bullion investors to liquidate long positions amid weak buying sentiment, traders said.

Spot gold sank to an intraday low of $897.10 an ounce and was at $905.50/906.70 by New York’s last quote at 2:15 p.m. EDT (1815 GMT), well below levels of $920.65/922.05 late in New York trade on Tuesday.

People were unwinding their long positions on gold, after the metal’s recent rally, said analyst Daniel Hynes of Merrill Lynch:

“We’ve seen net long positions on the COMEX decrease recently and I think we’re seeing a continuation of that movement out of gold just at the moment,” he said.

The U.S. active gold contract for June delivery settled down $16.20, or 1.8 percent, at $909 an ounce.

Gold held in New York-listed StreetTRACKS Gold Shares, the world’s largest gold-backed exchange-traded fund, fell to 623.41 tonnes on Tuesday from 641.82 tonnes the previous day.

The metal hit a three-week high of $952.60 last week, but attempts to stay above $950 were met by profit-taking. Dealers noted some physical demand, but it was not enough to trigger another rally toward last month’s record $1,030.80.

Read Full Guardian Article