Gold, Silver Plummet, U.S. Dollar Hits 7-Month High

Gold and silver futures plummeted Thursday as the U.S. dollar surged higher on heightened fears over a global recession and the sovereign debt crisis in Europe.

COMEX gold for December 2011 delivery settled lower by $74.20, or 4.1%, at $1734.10 per ounce.  December silver futures sunk $3.66, or 9.1%, to $36.81 per ounce.

The euro currency slid 1.0% to 1.3443 against the dollar, which helped propel the U.S. Dollar Index (DXY) higher by 1.0% to 78.434.  The DXY reached an intra-day high of 78.80 earlier today, its highest level since late February of this year.

Greg Anderson, a senior currency strategist at Citigroup , commented that “The market intended to freak about the world being a scary place but was holding off to see if the Fed had some miracle, and it doesn’t, so therefore it’s time to re-price everything.  In a panic, people are always buying dollars because they are looking for cash.”