Gold exchange traded funds took a hit last week with some traders blaming the declines on waning inflation expectations. A pullback in commodities such as oil may also have forced investors to sell gold to meet margin calls, others said.

SPDR Gold Shares (NYSEArca: GLD), iShares COMEX Gold Trust (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) all lost nearly 3% last week and fell below their 50-day moving averages.

Safe-haven investments had supported gold prices as concerns over currency fluctuations and political and economic risks mounted. After the sudden news on the release of strategic crude oil inventories, energy prices, a major component of rising inflation, dropped from the additional supply. Gold prices also dropped as traders dumped some holdings on news of a potentially lower inflation outlook. [Metals ETFs Trade on Greece, Fed.]

“Gold is falling on the back of the strengthening dollar,” commented wang Il Doo, a senior trader at Korea Exchange Bank Futures Co., reports Sungwoo Park for Bloomberg. “Oil tumbled, lowering inflation pressure.”

Additionally, the tumble in gold prices was aided by traders who engaged in some profit taking to cover losses elsewhere, reports Tatyana Shumsky for The Wall Street Journal.

“This downdraft could break $1,500 for a short time,” stated George Gero, vice president with RBC Capital Markets Global Futures. “There’s fund liquidation going on in gold.”

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