The gold price plunged again Friday, sinking $56.70 to $1,684 per ounce. Gold prices have now fallen in excess of $100 over the past 48 hours. Heavy liquidation in COMEX gold futures has led to the fierce decline in the price of gold. Broad-based selling on Wall Street amid disappointing Chinese economic data, fears over a double-dip recession, and continued worries over the European sovereign debt crisis have weighed heavily on financial markets.
The price of gold came under significant pressure yesterday morning as the U.S. dollar rallied to a seven-month high against a basket of foreign currencies. The spot gold price fell to its lowest level since mid-August. The SPDR Gold Trust (GLD), the world’s most liquid gold price proxy, tumbled to $164.60 Friday morning – leaving the world’s second largest ETF lower by 6.4% this week.
The commodities complex posted steep losses alongside the gold price and investors liquidated dollar-denominated assets. Silver and copper have been two of the hardest hit commodities, with gold’s sister precious metal plummeting 9.9% to $32.95 per ounce, as measured by the front month silver futures contract. Copper, a bellwether indicator of global economic activity, plunged to $3.34 per pound, off 4% – its lowest level in over a year.
Gold equities were hammered on Thursday with the AMEX Gold Bugs Index (HUI) finishing lower by 7.7% at 564.26. Two of the sector’s largest decliners were Barrick Gold (ABX) and Kinross Gold (KGC), which fell 8.6% and 7.4%, respectively. Silver stocks fared even worse, as Pan American Silver (PAAS) dropped 10.0% and Silver Wheaton (SLW) retreated 12.8%. The broader equity markets sank as well, as the Dow Jones Industrial Average (DJIA) fell 391.01 points, or 3.5%, to 10,733.83 – its lowest level since August 10. Gold mining stocks looked to open sharply lower Friday morning.