(MarketWatch) -- Gold futures fell Monday for a third straight session to end near $870 an ounce, wiping out their yearly gains as traders shaved positions on worries that the 403 tons of gold sales by the International Monetary Fund will increase supply and depress gold prices.Meanwhile, a stronger U.S. dollar also added downward pressures on gold prices.
Gold for April delivery fell $24.10, or 2.7%, to end at $871.50 an ounce in North American electronic trading. It dropped to as low as $865.10 earlier. The more active June contract also fell Monday, down 3.2% at $868.50.Gold has lost nearly 6% since April 1 and is now down 1.4% for the year, partly out of optimism that collective actions by leaders of the world's major nations may stem the global economic crisis.
IMF gold sales
Leaders from the Group of 20 nations said last Thursday they endorse 403 tons of gold sales by the IMF. The proceeds will be used to provide finance for the poorest countries over the next two to three years.The announcement came one day after the European Central Bank said it had completed the sale of 35.5 tons of gold.
The IMF's plan to sell the gold still needs to be approved by an 85% majority vote from its 185 members. The U.S., which has 17% voting power in the fund, essentially holds veto power.
Falling ETF investment
Investment in gold exchange-traded funds also stalled recently. Holdings in SPDR Gold Shares (GLD 85.30, -2.29, -2.6%) , the biggest gold exchange-traded fund, stood at 1,127.37 tons Friday, down slightly from a day ago, according to latest data from the fund.It's the first drop in SPDR holdings in one month. The SPDR lost 2.2% to $85.68 on Monday.
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