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PR Newswire
25-09-2011, 10:07 AM
The Straits Times
Sep 25, 2011
High-flying gold crashes over US$100
New York - Gold crashed over US$100 on Friday as a slide turned into a free fall, with weeks of volatility, renewed strength in the dollar and talk of hedge fund liquidation wrecking its safe-haven status.
Widespread talk of possible selling by big hedge funds covering losses in other markets set off one of the biggest routs on record in the precious metals group. The sell-off came even after relative calm was restored to the stock and oil markets following Thursday's losses.
Mounting fears of a global recession and a deepening Greek debt crisis made investors treat precious metals like any commodity, ignoring the safe-haven appeal that had made them a must-have in times of trouble.
The CME Group, which oversees trading in US gold and silver futures, responded by raising margins, or deposits, required on trades of the two precious metals as well as copper. The move would further squeeze optimistic gold investors.
The spot price of gold, which tracks trades in bullion, saw its biggest plunge since the financial crisis in 2008. The plunge took out several key technical supports, including the 100-day moving average for the first time since February.
By Friday afternoon in New York, spot gold was down 5 per cent, after falling over 6 per cent earlier to touch lows from August.
Since hitting record highs above US$1,900 in August, gold has seen extraordinary price swings as some investors began to have second thoughts about it staying as a haven from the euro zone turmoil and potential recession.
US gold futures' benchmark December contract on Comex settled down 6 per cent, or more than US$101, at under US$1,640 an ounce. Despite those steep losses, spot gold remained up 16 per cent year-to-date due in part to big gains in August.
Reuters
Sep 25, 2011
High-flying gold crashes over US$100
New York - Gold crashed over US$100 on Friday as a slide turned into a free fall, with weeks of volatility, renewed strength in the dollar and talk of hedge fund liquidation wrecking its safe-haven status.
Widespread talk of possible selling by big hedge funds covering losses in other markets set off one of the biggest routs on record in the precious metals group. The sell-off came even after relative calm was restored to the stock and oil markets following Thursday's losses.
Mounting fears of a global recession and a deepening Greek debt crisis made investors treat precious metals like any commodity, ignoring the safe-haven appeal that had made them a must-have in times of trouble.
The CME Group, which oversees trading in US gold and silver futures, responded by raising margins, or deposits, required on trades of the two precious metals as well as copper. The move would further squeeze optimistic gold investors.
The spot price of gold, which tracks trades in bullion, saw its biggest plunge since the financial crisis in 2008. The plunge took out several key technical supports, including the 100-day moving average for the first time since February.
By Friday afternoon in New York, spot gold was down 5 per cent, after falling over 6 per cent earlier to touch lows from August.
Since hitting record highs above US$1,900 in August, gold has seen extraordinary price swings as some investors began to have second thoughts about it staying as a haven from the euro zone turmoil and potential recession.
US gold futures' benchmark December contract on Comex settled down 6 per cent, or more than US$101, at under US$1,640 an ounce. Despite those steep losses, spot gold remained up 16 per cent year-to-date due in part to big gains in August.
Reuters
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