On Tuesday, Gold plummeted as much as 5.3 percent, suffering the worst one-day plunge in seven years, as a return of risk tolerance amid positive economic figures and latest coronavirus relief package expectations lifted the S&P 500 to near-record highs.
Many precious metals have also witnessed a plunge, with silver plunging as much as 13.8 percent-the largest daily fall since October 2008. It was down 13.4 per cent by 1:59 p.m. to $25.24 per ounce. EDT (GMT: 1759). Platinum dropped 4.7% to $940.08, and palladium slipped 4.7% to $2,116.33.
A senior market analyst at broker OANDA, Edward Moya said, “This feels like a mini crash. We could not overcome the early morning headlines of a Russian potential vaccine, and there was just continued optimism flowing into stocks.”
Commercial gold dropped 5.2 percent to $1,921.50 per ounce, retreating sharply from Friday’s record high of $2,072.50 and was set for its worst day since June 2013. US gold futures settled down 4.6 percent at $1,946.30.
The head of commodity strategies, Bart Melek said, “The precious metals complex was driven by a drop in rates, a steady increase in inflation expectations and a falling US dollar. The rally is now giving up some of these gains as these drivers lose momentum.”
“Speculators and Commodity Trading Advisors (CTAs) are reducing their gold and silver exposure, as volatility trends higher and as they take profits out of a crowded trade”, he added.