Gold plunged over 5 percent to its lowest in three years on Thursday, leading a global market rout one day after the US Federal Reserve gave its most explicit signal yet it plans to wind down the era of easy money. Losses snowballed throughout the day, triggering technical selling below key support at $1,320 an ounce and culminating in one of bullion's biggest routs since the 2008 economic crisis. Technical analysts said prices might have to fall another 6 percent before finding new support at $1,200.
Silver plunged nearly 8 percent. US stocks fell 2.5 percent and oil tumbled 4 percent. Spot gold was down 5.2 percent at $1,280.54 an ounce by 4:28 pm EDT (2028 GMT), having hit $1,276.19, which marked its lowest level since September 21, 2010. The Thomson-Reuters/Jefferies CRB commodities index dropped 3 percent, while benchmark US 10-year bond yields rose to the highest levels since August 2011, with few signs of when the trend will end.
US Comex gold futures for August delivery settled down $87.80 an ounce at $1,286.20, with trading volume already surpassing 360,000 lots, on what might be the highest daily turnover in nearly a month, preliminary Reuters data showed. Gold is now more than 30 percent below its record high of $1,920.30 an ounce, set in September 2011.
Silver was the biggest decliner among the precious metals, sliding nearly 8 percent to $19.64 an ounce, having hit a low of $19.58 an ounce, its weakest since September 2010. Platinum dropped 3.6 percent to $1,359.50 an ounce, while spot palladium slid 4.7 percent to $661.25 an ounce.
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