NEW YORK, Feb 11: US gold futures dropped 2.6 per cent to finish sharply lower on Friday, as heavy fund and speculator selling pounded the precious and base metals following recent steep gains, dealers and analysts said.

Palladium futures sank 6.5 per cent in the latest fund-driven correction lower in the metals, while platinum lost 3.1 per cent in value and silver prices fell 2.9 per cent.

Trading sources said the liquidation was fueled mostly by technical weakness after the market was unable to make any headway above recent multiyear highs.

A failure overnight to extend Thursday’s bounce from this week’s lows disappointed investors and triggered widespread stop-loss selling.

April delivery gold settled $14.60 lower at $553.50 an ounce on the New York Mercantile Exchange’s COMEX division, after trading from $572.30 to a session low of $550.

Prices skidded lower even after the dollar rose against the Japanese yen and the euro after a US trade report came in neutral-to-bearish in the morning. Gold typically rises on a weaker dollar.

Bullion last week spiked to a 25-year high of $574.60, while COMEX April gold hit $579.50.—Reuters