Gold slipped nearly 2 percent on Friday after earlier touching a 2-1/2 month high as a slide in the global equity markets sparked a broad-based commodities sell-off. Platinum, palladium and silver all tumbled, reflecting losses in crude oil, industrial metals, sugar and grains, as European and US stock markets posted huge losses.
Spot gold was quoted at $897.00/901.00 an ounce at 1436 GMT against $911.50 an ounce late in New York on Thursday. Earlier it touched a session low of $887.95 an ounce. Gold has been underpinned in recent weeks by interest in bullion as a haven from risk as markets descended into chaos. But that has not been enough to support it as losses have intensified.
"The flight to quality into gold and possibly silver is not necessarily a valid approach to the market right now," said Alan Plaugmann, head of futures and options at Saxo Bank. The dollar benefited from the market turmoil, hitting a 14-month high against a basket of currencies as investors sold emerging market stocks and rushed back to the relative safety of the US currency.
Turmoil on the equity markets sparked a broad-based sell-off of commodities. Crude futures fell more than $7 to hit a one-year low as fears that economic turmoil would cut demand. Recent prices rises have caused some selling in India, the world's largest gold market, ahead of this month's Hindu festivals. Among other precious metals, silver was quoted at $11.70/11.80 against $12.01 late in New York on Thursday, having earlier touched a low of $11.22.
The platinum group metals tumbled, tracking losses in the industrial metals. Spot platinum was trading at $990/1,014 an ounce against $1,018.50. Earlier it fell 3 percent to an intraday low of $982. Its sister metal palladium fell to $189.50/199.50 from $198, having earlier touched a session low of $184.50, its weakest level since October 2005.
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