With the price of gold slipping steadily from its March peak of $394 an ounce to $373 last week, individual investors have pulled millions of dollars out of gold-oriented mutual funds, according to data gathered for Money magazine's Small Investor Index.

Analysts say that the metal's slide has mainly been a response to the Federal Reserve's short-term interest-rate hikes, which have cooled inflationary expectations. And they note that several large hedge funds have been selling gold.Prices have dropped despite concerns about political upheaval in South Africa, which produces roughly a third of the world's bullion each year; threats to gold production often lift bullion prices. Last week, that nation successfully completed its first all-race elections, leaving gold prices largely unchanged but boosting South African mining shares.

Small investors started fleeing gold funds just as the metal's price began to drop. AMG Data Services reports that the funds, with $5.6 billion in assets, had net redemptions of $137 million in April, after pulling in $323 million in March. For example, the Invesco Strategic Gold fund, with $267 million in assets, had $51 million in withdrawals in April, following net inflows of $31 million in March.

Many analysts believe gold prices will continue to fall. "With the Fed acting and peace prevailing in South Africa, gold might sink as low as $350 an ounce this year," says Bernard Savaiko, precious metals analyst at Paine-Web-ber.

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Last week, the Money Small Investor Index, which tracks the typical individual's holdings, gained $154 to $45,199. Stocks rose $131, while bonds were unchanged. CDs and money funds were up $8. Gold (including mining shares) added $13.

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