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Gold's biggest drop in 30 years

Monday, April 15, 2013 - 01:33

April 15 - Gold's hefty losses pick up pace, dropping to its lowest since March 2011, and investors slash exposure to commodities for a second day after underwhelming Chinese data signals a setback for the global economy. Ciara Sutton reports

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Tumbling 8 percent, gold headed for it biggest one-day drop in 30 years. The downward momentum has gathered speed after more than four months of investor selling, with bullion shedding around 9.5 percent since last week. The fresh falls come as China's economy grew less than expected, frustrating investor hopes for the global economy. Gold has taken a battering since last week when Cyprus announced a plan to sell reserves to raise around 400 million euros, prompting concerns other indebted euro zone countries could follow suit. But Saxo Bank's Nick Beecroft says there are other factors affecting the decline. (SOUNDBITE) (English) CHAIRMAN AND MARKET ANALYST AT SAXO BANK, NICK BEECROFT, SAYING: "There may be a psychology that with Japan doing so much quantitative easing that may take the pressure off the US, to continue QE for as long as might have been expected. That could lead the dollar to strengthen over time, so there you have the dynamic that could explain the gold coming down against the dollar." Investors have been dumping gold and questioning whether the metal's decade long bull-market could be over. Not even escalating tensions on the Korean peninsula have been able to boost gold's safe-haven appeal. But IG's Chris Beecham isn't overly concerned. (SOUNDBITE)(English) CHRIS BEECHAM, MARKETS ANALYST AT IG, SAYING: "It depends on where you look and your perspective. If you are looking from a far longer time frame then the bear market in gold has started. But it really hasn't dented the long up-trend." Other precious metals have also been hit by heavy selling, with silver falling to its lowest since 2010.

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Gold's biggest drop in 30 years

Monday, April 15, 2013 - 01:33