AGL 40.02 Increased By ▲ 0.02 (0.05%)
AIRLINK 127.50 Increased By ▲ 0.46 (0.36%)
BOP 6.70 Increased By ▲ 0.03 (0.45%)
CNERGY 4.52 Increased By ▲ 0.01 (0.22%)
DCL 8.43 Decreased By ▼ -0.12 (-1.4%)
DFML 41.67 Increased By ▲ 0.23 (0.56%)
DGKC 87.10 Increased By ▲ 0.25 (0.29%)
FCCL 32.18 Decreased By ▼ -0.10 (-0.31%)
FFBL 65.00 Increased By ▲ 0.20 (0.31%)
FFL 10.15 Decreased By ▼ -0.10 (-0.98%)
HUBC 109.80 Increased By ▲ 0.23 (0.21%)
HUMNL 14.67 Decreased By ▼ -0.01 (-0.07%)
KEL 5.15 Increased By ▲ 0.10 (1.98%)
KOSM 7.20 Decreased By ▼ -0.26 (-3.49%)
MLCF 41.40 Increased By ▲ 0.02 (0.05%)
NBP 59.99 Decreased By ▼ -0.42 (-0.7%)
OGDC 195.55 Increased By ▲ 5.45 (2.87%)
PAEL 28.40 Increased By ▲ 0.57 (2.05%)
PIBTL 7.76 Decreased By ▼ -0.07 (-0.89%)
PPL 151.56 Increased By ▲ 1.50 (1%)
PRL 26.65 Decreased By ▼ -0.23 (-0.86%)
PTC 16.19 Increased By ▲ 0.12 (0.75%)
SEARL 78.19 Decreased By ▼ -7.81 (-9.08%)
TELE 7.47 Decreased By ▼ -0.24 (-3.11%)
TOMCL 35.50 Increased By ▲ 0.09 (0.25%)
TPLP 8.09 Decreased By ▼ -0.03 (-0.37%)
TREET 16.14 Decreased By ▼ -0.27 (-1.65%)
TRG 53.10 Decreased By ▼ -0.19 (-0.36%)
UNITY 26.69 Increased By ▲ 0.53 (2.03%)
WTL 1.25 Decreased By ▼ -0.01 (-0.79%)
BR100 9,941 Increased By 57.3 (0.58%)
BR30 30,924 Increased By 324.3 (1.06%)
KSE100 93,818 Increased By 462.2 (0.5%)
KSE30 29,070 Increased By 139.3 (0.48%)

Gold tumbled more than 8 percent on Monday, and was down more $100 per ounce at midday on track for its biggest one-day decline in dollar terms, as investors ditched the precious metal en masse in search for better returns in other assets. Gold's drop triggered a broad based commodity selloff and was mirrored by a 10 percent plunge in silver. Platinum and palladium also fell sharply.
Bullion's harrowing sell-off caught many veteran investors by surprise. In percentage terms, it appears headed for the biggest two-day fall since 1983. There has been no drastic changes in gold's supply/demand picture in the last week although numerous factors have kept gold from rising while investments like US stocks took off.
While last week's news that the Central bank of Cyprus might sell gold reserves to finance its European Union bank bailout did trigger a rush for the exits when bullion slid below the pivotal $1,500 an ounce threshold, few saw it likely to usher in a round of other official disposals. "The pressure from proposed sale of Cyprus gold is one of the factors, and once one of them start they all run from the hen house," said Robert Richardson, senior account executive and trading officer at Canadian broker-dealer W.D. Latimer Co Ltd.
The big question is whether the gold bull market is over after 12 years of consecutive yearly gains. Gold has now halved its rally since the 2008 economic crisis, leaving the metal $550 below its record high of $1,920.30 set in September 2011. Weaker-than-expected Chinese economic data earlier on Monday simply gave investors another excuse to slash holdings as US equities and other key industrial commodities including oil and copper fell. But Monday's selloff in the Dow Jones industrial stock average comes days after stock indexes hit record highs.
Recent signs that Fed officials appeared to be nearing a decision to start winding down their bond purchases to end stimulus contributed to the negative tone for gold, even though inflation has failed to materialise as feared during its rounds of post-financial crisis quantitative easing. Spot gold dropped as low as $1,355.80 an ounce before recovering slightly to $1,371.30 just after noon EDT (1600 GMT), still down 6.9 percent.
US futures for June delivery were down $122.40 at $1,378.60 in very heavy early afternoon turnover, with trading volume on track to hit a record high, preliminary Reuters data showed. Investors cut exposure to gold, with total holdings at the world's major bullion gold-backed exchange-traded-funds falling to their lowest since early 2012. Among other precious metals, silver was down 9.6 percent to $23.38 an ounce. Palladium dropped 5.7 percent to $667.72, while platinum was down 4 percent at $1,425.50.

Copyright Reuters, 2013

Comments

Comments are closed.