SAN FRANCISCO – Gold futures on Tuesday took their biggest plunge in six months optimism about the global economy dimmed the safe haven metal and appeal mainly to investors withdrew money.
Gold for February delivery (GCG11 1383, +4.00, +0.29%) fell $ 44.10, or 3.1%, at $ 1,378.80 an ounce on the Comex division of attention the New York Mercantile Exchange.
That was the biggest one-day fall for gold futures since July. It was the lowest settlement in metal nearly three weeks. Gold settled at $ 1,371 per ounce on December 16.
“People are shooting first and asking questions later,” said Adam Klopfenstein, senior market strategist with Lind-Waldock in Chicago.
Silver lost more than 5%, while copper ended 2% lower, giving up the previous session record.
The flow of money primarily for money and turned the dollar and to a lesser extent bonds, especially corporate bonds, with the major asset classes offer Tuesday.
For gold, 30% advanced in 2010, was the first “meaningful” selloff in the few weeks, said Charles Nedoss, a senior market strategist with Olympus futures in Chicago.
“We [the investors] see shake the money tree,” he said. Large fund liquidation, based on fundamentals or technicals, the story, he added. “The longer term [upward] trend for gold is still intact. This is just a blip.”
Active rebalancing may also play a role in a fund sell-off Tuesday fine-tuning of their weightings have played during the first half of January, Metals Kitco analyst Jon Nadler wrote in a note to clients.
Any additional sell-offs for gold is likely to be tempered by the fund to buy later in the week due to lower prices, Lind-Waldock’s Klopfenstein said.
Copper futures also came under pressure after touching a fresh peak earlier in the day.
It earlier had risen to a record in London, where metals markets were closed Monday, and hit its best level since 2007 in China.
Copper for March delivery (HGH11 437.05, +0.15, +0.03%) fell 9 cents, or 2%, to $ 4.37 per pound on the Comex division of the New York Mercantile Exchange.
The metal traded as high as $ 4.47 earlier.
Copper closed at a record high Monday, stabilized at $ 4.458 per pound. Monday closing record which followed four days in the previous week as investors grew optimistic about the outlook for global growth in 2011.
Recent high prices for copper and other base metals are expelled “by the strong economic data and strong Asian equity markets,” analysts at Commerzbank said in a note to clients.
In the U.S., stocks opened higher, extending Monday rally, weakened after data showed a 0.7% increase in factory orders in November.
The Dow Jones Industrial Average was most recently edges higher, while the Nasdaq Composite and the S & P 500 remained in the red. Read more about stocks.
Other metals were caught in the downdraft gold and copper, with silver for March delivery (SIH11 2972, +20.70, +0.70%) fell $ 1.62, or 5 , 2%, to $ 29.51 an ounce.
That was the lowest finish since December 27 silver, when it closed at $ 29.26 an ounce.
Palladium for March delivery (PAH11 775.10, +6.05, +0.79%) fell $ 31.35, or 3.9% to $ 769.05 an ounce. April platinum (PLJ11 1745, -2.40, -0.14%) fell $ 39, or 2.2%, to $ 1,747.40 an ounce.
! The dollar index / i quotes/comstock/11j: dxy0 (DXY 79.54, +0.10, +0.12%) was trading Tuesday at 79.39, an increase of 0.3%.
A rising dollar is generally negative for commodities as it makes them more expensive for holders of other currencies. For gold, but also chip away at the role of the metal as a currency of last resort.
source:marketwatch
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