Gold Tumbles to $1,800, Silver Drops to $41

Precious metals turned sharply lower Wednesday as risk aversion continued to subside in financial markets.

Gold futures initially climbed to $1,855 this morning, but plunged $60.00 to $1,801.30 per ounce as of 9:06am ET.

Silver followed suit, sliding $1.32, or 3.1%, to $40.97 per ounce.

The sell-off in precious metals coincided with a rebound in the broader equity markets.  S&P 500 futures traded considerably lower prior to the U.S. market open, but the index quickly bounced back.  The S&P 500 climbed 1.0% to 1,174.08, while the Dow Jones Industrial Average (DJIA) rallied 0.8% to 11,268.42.

The CBOE Volatility Index (VIX), the most closely followed measure of investor risk aversion, slid 2.8% to 35.24.

One catalyst for the market’s rebound and weakness in gold and silver was this morning’s better than expected durable goods report.  With a 4.0% increase, durable goods beat the consensus estimate among economists of 1.9%.  Excluding transportation, durable goods rose 0.7% – economists were expecting a 0.6% decline.