Panicked traders send gold, silver and copper into ‘downward spiral’
December gold suffered another day of steep losses, dropping $82 an ounce, or 4.7%, to $1,659.50 in New York in noon trade on Friday, as investors were forced to raise cash to cover losses suffered on global stock markets this week.
Copper extended its sharp declines on the London Metal Exchange falling as much as 7.3% to $7,115.75 a metric ton. Prices declined for a sixth day in a row losing 14% this week and have now slumped 26% from the record high of $10,190 set in February. Silver was hardest hit on Friday, plummeting 11.2% to $32.48.
One metals analyst summed up the day this way: “We’re in a downward spiral, and no one knows when it’s going to end.” Global stock markets stabilized on Friday with most major indices in positive territory after Thursday’s dramatic selling.
MarketWatch quotes Jim Steel, precious metals analyst with HSBC in New York: “Gold has gotten so much safe-haven buying, this is just a significant correction. Stabilization could come around the $1,650-an-ounce level.”
Reuters quotes Soozhana Choi, head of commodity research in Asia at Deutsche Bank in Singapore” “The dollar has strengthened in all of this and everyone is de-risking and putting money into the dollar because of the deteriorating economic outlook.”
Bloomberg quotes Robin Bhar, an analyst at Credit Agricole SA in London: “We’re in a downward spiral, and no one knows when it’s going to end. There is a lot of uncertainty at this time as to how demand will develop.”