SAN FRANCISCO (MarketWatch) — Gold futures took another tumble on Thursday to tally a 6% loss in six trading sessions and close at their lowest level in a month.

The decline followed news of a decline in the U.S. inflation rate as well as a recent string of gains in U.S. equities that has drawn attention away from gold.

Gold for June delivery GCM23, shed $9.30, or 0.7%, to settle at $1,386.90 an ounce on the New York Mercantile Exchange. Including Thursday’s loss, prices have fallen 5.9% in six straight trading sessions. They settled Thursday at their lowest since April 17.

Gold plunges on tame inflation

Tracking the most-active contracts, gold prices have lost over 17% year to date.

“Nary a whiff of inflation is diminishing the appeal of gold as a hedge against price risks, while continued gains in equities are weighing on the yellow metal’s more general safe-haven appeal,” said Peter Grant, chief market analyst at USAGold.

Gold is often seen a hedge against inflation and tends to benefit in an inflationary environment.

U.S. consumer prices fell 0.4% in April, according to the Labor Department. The inflation rate over the past 12 months fell to 1.1% in April from 1.5% in March, marking the lowest level since November 2010.

Other data Thursday showing a jump in weekly U.S. jobless claims, a negative reading on a regional manufacturer business conditions index and a weaker dollar didn’t provide much support for the precious metal.

Jobless claims climbed to a six-week high and the Philadelphia Federal Reserve’s index of business conditions turned negative in May for the first time since February.

Downbeat economic data are usually supportive for gold as a safe haven, but “conflicting data made for conflicting signals,” said Phil Storer, director of trading at Dillon Gage Inc., a precious-metals dealer and refiner. “The long-term trend is still down.”

That drop came as the dollar moved lower. The ICE dollar index DXY, -0.32% , which measures the greenback’s movement against six other major currencies, fell to 83.606, from the 83.795 level seen on Wednesday. Recent strength in the greenback has been contributing to losses in dollar-denominated commodities.

The dollar gained earlier Thursday as data out of Japan showed economic growth of 0.9% in the first quarter, beating forecasts, and also as the Australian dollar tumbled.

Ole Hansen, head of commodities strategy at Saxo Bank, said the renewed gold downturn began after the dollar broke above 100 yen last week. “We’ve seen continued dollar strength since then. The near-term outlook is pointing towards stronger dollar, even though we may find a floor sooner or later.”

One reason gold is selling off is that markets are less than a month away from the last selloff, and investors are wondering if there’s going to be an extension of that, said Hansen. He said $1,300 to $1,302 an ounce should be the “line in the sand,” for gold. “At that stage, we will have corrected 50% from the whole rally that started in 2008.”

Gold demand

The World Gold Council said in a report on Thursday that investors during the first quarter didn’t buy enough physical gold to offset outflows from gold-exchanged traded funds.

Total world gold demand was 963 metric tons in the first quarter, down 13% from the same time a year ago, according to the report.

Bloomberg News

Gold futures from January through March lost nearly 5%, and shares in the SPDR Gold Trust GLD, -0.54% , the largest gold-backed ETF in the U.S., fell 4.7%. Gold prices in one mid-April session tumbled 9.3%, suffering their biggest one-day decline since the 1980s while pushing further into bear-market territory.

Gold futures finished the month of April down 7.8% and the GLD shares fell 7.6%.

But the World Gold Council also said total ETF gold holdings in the first quarter were higher than the year-ago period, and demand for jewelry, bars and coins increased.

Billionaire investor George Soros cut his holdings of gold in the first quarter, which ended just ahead of that major plunge in the metal in mid-April. Paulson & Co. Inc., run by billionaire hedge-fund manager John Paulson, maintained its holdings in GLD for the quarter ended in March.

On Thursday afternoon, shares in GLD were down 0.3%. The Philadelphia Gold and Silver Index XAU, -1.28% added 1%.

Among other metals traded on Comex, July silver SIN23, finished flat at $22.66 an ounce. It lost 4.4% in the last two sessions.

July copper HGN23, tacked on 3 cents, or 0.9%, to $3.295 a pound, rebounding after a two-session decline of almost 3%.

June palladium US:PAM3 rose $11.70, or 1.6%, to $740.75 an ounce and July platinum futures US:PLN3 lost $5.10, or 0.3%, to $1,485.60 an ounce.