Gold falls on speculation demand may slow after price rally

Gold today fell, erasing earlier gains, amid concern that demand might slow from investors and physical buyers after prices rallied to a two-week high.
       
Gold fell 0.2% to 1,411.74 dollar an ounce, after earlier rising to 1,422.10. Prices are up 1.8% this week, while still a second straight monthly loss.
       
Silver fell 0.7% to 22.61 dollar an ounce, a second weekly gain. Still, prices are down 7.1% in May, a fourth straight monthly decline.
      

Gold demand in China, the world's biggest consumer after India, may slow in the second half of this year after surging in April when the precious metal tumbled into a bear market, the China Gold Association said.
     
Earlier today, bullion reached the highest level since May 15, extending yesterday's 1.5% gain, before declining. Gold has dropped 16% this year as equities rallied and the dollar strengthened amid concern that the U.S. Federal Reserve may slow the pace of stimulus.
     
Data yesterday showed the U.S. Economy grew at an annualised 2.4% pace in the first quarter, down from a preliminary reading of 2.5%, while jobless claims increased.
      
Holdings in the SPDR Gold Trust, the largest ETP backed by the precious metal, held level after climbing yesterday for the first time since May 9.