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Gold drops to six-month low, could fall further |
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(Reuters) - Gold languished at a six-month low on Friday and was on the edge of tipping over to a 3-1/2 year trough after the Federal Reserve's move to curb its bond-buying stimulus prompted a huge sell-off.
This week's loss puts the metal firmly on track to post its biggest annual loss in 32 years.
Spot gold fell to a fresh 6-month low of $1,185.10 an ounce earlier on Friday, before clawing back some ground to $1,196.06 by 0343 GMT due to bargain-hunting.
Analysts and traders say charts and sentiment remain bearish, with gold at risk of falling further.
"Asian trading volumes are really thin so I don't expect much movement (immediately). But through the day I think we could take out the year-lows," a Hong Kong-based precious metals trader said late in the morning.
"Sentiment took a real beating yesterday. Many people were surprised with the delayed reaction to the taper news. I wouldn't be surprised if we end the year below $1,200."
On Wednesday, the day of the Fed announcement of a $10 billion cut in its monthly bond purchases, gold fell 1 percent. But the selling picked up on Thursday, with the metal losing 2 percent, close to the 2013 low of $1,180.71 in late June - which is also the lowest since 2010.
Gold has lost about 3 percent for the week, and 29 percent for the year.
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