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Gold prices in New York fell as much as 4 percent after U.S. equities tumbled the most since September 2002, triggering a metal sell-off by investors.
Gold futures for April delivery fell $20.90, or 3 percent, to $666.30 an ounce at 4:38 p.m. New York time in electronic trading on the Comex division of the New York Mercantile Exchange. Prices earlier touched $660. The metal fell $2.60, or 0.4 percent, to $687.20 in floor trading that ended at 1:30 p.m. The metal closed at a nine-month high yesterday.
The largest drop in a decade in Chinese equities sparked a plunge in shares in the U.S., Europe and other emerging markets. U.S. Treasuries posted the biggest gain since June 2005 as the rout in global stocks and bonds bolstered demand for the safest debt.
``The Chinese fire alarm rang loud and clear across all markets,'' Jon Nadler, an investment-products analyst at Montreal- based co Minerals & Metals Co., said in an e-mail. ``Who knows how many hedge funds had serious positions riding on the presumptively insatiable Chinese demand for commodities. Gold was dragged down significantly lower.''
Funds sold mining stocks and the StreetTracks Gold Trust, the exchange-traded fund, or ETF, backed by physical gold. The Philadelphia Stock Exchange Gold & Silver Index fell 6.9 percent to 137.56. The StreetTracks fund, which last week reached a record $10.5 billion, dropped as much as 4.5 percent.
``The stock market didn't collapse until after gold's close,'' said Billy Flahive, a gold trader and partner at Eagle Futures Inc. in New York. ``The liquidation got piled into gold. When they liquidate the ETF, they've got to liquidate gold bullion, so they had to come to the market. They did it after the close so it's a little dramatic.''
China
Investment demand for bullion jumped 29 percent last year in China, the second-biggest buyer of gold after India, according to the producer-funded World Gold Council. China's appetite for commodities helped drive the prices of copper and crude oil to records last year.
Gold's losses may be limited should investors seek a haven from turmoil in the markets, analysts said.
``If anything, the sell-off in Chinese stocks will increase demand for gold,'' said James Turk, founder of GoldMoney.com, which had $186 million worth of gold and silver in storage for investors at the end of January.
``As investors in China get burned with stocks, they will shy away from speculative stuff, and opt for the security that gold offers,'' Turk said before the close of Comex floor trading. |
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發表於 2007-2-28 10:54:04
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