Gold Settles Lower at $1,578 After Sell-Off

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Gold ended below $1,600 an ounce after hitting a seven-month low on Wednesday, as rumors of a troubled hedge fund forced to liquidate positions triggered a sell-off of commodities.

In what appeared to spark heavy losses in crude oil, gold tumbled 1.5 percent as traders cited talk that a large commodity hedge fund had been forced to dump its holdings.

Silver and platinum fell more than 2.5 percent, while Brent crude oil lost about 2 percent.

Gold selling accelerated after bullion slipped below $1,600 an ounce and completed a bearish technical formation known as a "death cross," when its 50-day moving average broke below its 200-day moving average.

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Analysts said some investors were selling gold due to jitters about upcoming minutes from a U.S. Federal Reserve meeting in January. Minutes from the December meeting showed some policymakers had been mulling a lessening or complete withdrawal of Fed stimulus.

Spot gold was down 2.2 percent at $1,569 an ounce, having hit $1,578.06, its lowest since July.

U.S. gold futures settled $26.20 lower at $1,578.00 an ounce.

Spot silver last fell 3.1 percent to about $28 an ounce, platinum last dropped 2.6 percent to $1,643, and palladium was last down 3.6 percent at $734 an ounce.