Gold fell 2 percent to a two-week low on Friday, on track for its biggest one-day drop since mid-April, as a breach of key chart levels prompted heavy selling of U.S. futures, already under pressure from a stronger dollar and rising stocks markets.
Traders said sell stops were triggered as the metal broke support at $1,445 and $1,440 an ounce, prompting a sharp move down to session lows at $1,428.40 an ounce.
Spot gold was down 1.7 percent at $1,431.91 an ounce at 1203 GMT, while U.S. gold futures for June delivery were down 2.6 percent at $1,430. Earlier they fell as low as $1,427.10.
"We were sitting in a fairly tight $1,440 to $1,480 range, which was finally breached to the downside," VTB Capital analyst Andrey Kryuchenkov said. "Orders were triggered below $1,440."
"The U.S. dollar index is at late April highs, back above 83," he added. "That is one of the few things driving it, given still small volumes and little in the way of fundamental developments."
The dollar hit a 4-1/2 year high against the yen on Friday and European shares hit five-year highs after U.S. jobs data beat forecasts on Thursday and on signs Japanese investors have begun buying foreign bonds.
Oil prices fell, with Brent crude down 1.6 percent and U.S. crude down 2 percent.
Rising optimism over the U.S. recovery has also boosted the appeal of assets like stocks at gold's expense, and has called into question the scope of the Federal Reserve's quantitative easing programme, a major support to bullion in recent years.
"The Fed may step up QE or step down QE depending on how the economy performs," Credit Agricole analyst Robin Bhar said. "So far, the data seems to be improving, which suggests they're likely to take their foot off the pedal. That would argue for weaker gold."
ETF REPORTS INFLOW
Deutsche Bank became the latest bank to cut its gold forecast on Friday, reducing its price view for the metal to $1,533 an ounce this year from $1,637 an ounce, and to $1,500 an ounce in 2014 from $1,810.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, reported its first inflow since March 19 on Thursday, of 2.7 tonnes. The SPDR's holdings are down 167.1 tonnes so far in the second quarter.
Spot platinum was down 1.2 percent at $1,484.24 an ounce, while spot palladium was down 1 percent at $696.72 an ounce.
Anglo American Platinum said on Friday it would cut 6,000 South African mining jobs, fewer than half the 14,000 initially proposed, as it strives to restore profits without triggering a backlash from the government and restive unions.
The world's top platinum producer said it would also keep open one of four shafts slated for closure near the platinum belt city of Rustenburg.
However, the cuts will take 250,000 ounces out of global platinum production this year and a further 100,000 ounces a year in the medium term, the company said. Initially, Amplats had wanted to cut output by 400,000 ounces.
Silver was down 1.1 percent at $23.40 an ounce.