SAN FRANCISCO (MarketWatch) — Gold futures marked their fourth straight session of declines on Tuesday, as strength in the dollar and a rally in U.S. equities lured investors away and pushed prices for the precious metal to their lowest close in nearly three weeks.

Strong physical demand from Asia, however, remains a key support, analysts said.

Gold for June delivery GCM23, fell $9.80, or 0.7%, to settle at $1,424.50 an ounce on the Comex division of the New York Mercantile Exchange. Prices, which tallied a four session loss of more than 3%, settled at their lowest level since April 24.

Changing Asia’s labor conditions

Strength in the dollar on Tuesday kept pressure on gold prices. At last check, the dollar index DXY, -0.32% was at 83.547, up from late Monday’s level of 83.276.

Gold and other dollar-denominated commodities tend to fall when the dollar strengthens, making them more expensive for holders of other currencies.

U.S. equities also rallied as Wall Street adapted to the view of an improving economy.

As long as the Federal Reserve is pumping money into the system, the equity market should continue to do well, said Adam Koos, president of Libertas Wealth Management Group.

With all that extra currency in the system, gold should increase in value as well, but maybe “it’s a matter of the metal being boring, old hat,” he said. Or maybe investors are “so enamored by the equity markets” that they’re taking their money out of gold exchange-traded funds and “joining the herd on the equity side.”

Overall, it’s “just an ugly climate out there for metals in the game of investing,” said Koos. “Probably best to have a drink or three in the clubhouse while the weather improves — might want to bring a sleeping bag, though.”

Gold prices on Monday fell $2.30, or 0.2%, as the dollar strengthened and investors weighed a report indicating the Fed is preparing to bring current monetary stimulus to an end. The Fed has mapped out a plan for winding down its program of buying $85 billion in bonds each month, according to a report in The Wall Street Journal late Friday.

Tapering the Fed’s bond-buying program would make the U.S. dollar more attractive in terms of yield, analysts say. Also, the easy monetary policy tends to raise the risk of inflation, and gold is seen as a hedge against inflation.

Gold support

Gold-futures prices are trading more than 3% lower month to date, after already suffering a drop of 7.8% last month.

Gold prices fell nearly 8% in April. Bloomberg News

But “the physical and true gold market, not paper contract market, is on target for the best year ever and shortages and premiums in the physical market are the norm at this time,” said Steven Evanson, chief executive officer at Evanson Asset Management.

“The physical market will dictate the price of gold longer term but short gold-futures contracts suppress the price short-term,” he said.

Gene Arensberg, editor of the Got Gold Report, said investors in Asia “are scooping up as much or more of the gold recently returned to the market” from gold exchange-traded products like the SPDR Gold Trust GLD, -0.54% .

“In that sense, gold is migrating from west to east at a pretty fast clip,” he said.

Gold holdings in the SPDR Gold Trust stood at 1,051.65 metric tons on Monday, unchanged from Friday, but down from 1,075.23 on May 1.

In afternoon trading, shares of the ETF edged down by 0.5%. The Philadelphia Gold and Silver Index XAU, -1.28% was also down 1.5%, with shares of Iamgold Corp. IAG, -0.93% losing 2.9%.

In Comex metals action Tuesday, silver for July delivery SIN23, fell 32 cents, or 1.3%, to $23.38 an ounce, while copper for July delivery HGN23, fell 7 cents, or 2.1%, to $3.29 a pound.

June palladium US:PAM3 tacked on $8.45, or 1.2%, to $727.15 an ounce while July platinum US:PLN3 rose $17.40, or 1.2%, to $1,501.90 an ounce.

On Tuesday, workers at Lonmin PLC UK:LMI held a wildcat strike which closed the Marikana mine in South Africa and triggered worries about fresh violence at the site of protests that resulted in the deaths of 34 people. Lonmin suspended all work at the mine after employees refused to go underground.

A report released Monday by Johnson Matthey showed that supplies of both metals swung to a deficit last year. The report attributed the drop in platinum inventories to the steep decline in output from South Africa.