Gold fell more than 1 percent on Friday, extending a sell-off from the previous session when the US central bank chief gave no hint on imminent stimulus, disappointing investors and dampening the appeal of gold as a hedge against monetary easing.
COMEX gold led the decline earlier in the day as stop-loss selling kicked in when prices traded lower around $1,580 level, traders said.
“Everybody put their orders in and that triggered a waterfall of stops,” said a Singapore-based trader.
Prices have since pared some losses, with spot gold up from a one-week low of $1,561.44 to $1,571.29 by 0651 GMT, down 1.1 percent from the previous close. Gold was headed for a 3.4-percent weekly decline.
The US gold futures contract for August delivery tumbled nearly 2 percent to an intra-day low of $1,556.4, and recovered some losses to $1,572.70.
Gold bulls had hoped for US Federal Reserve Chairman Ben Bernanke to signal further monetary easing, especially after last Friday’s US employment data showed a surprisingly weak job market.