MW: Gold falls below $750 in broad commodities sell-off
Copper slides 6% in session, set for biggest yearly percentage drop since 1988
NEW YORK (MarketWatch) -- Gold futures fell Wednesday below $750 an ounce for the first time in more than a month, while copper futures were set for their worst year since 1988 in a broad sell-off that was sending stocks and commodities sharply lower.
Meanwhile, the U.S. dollar jumped against the euro and British pound, helping push down dollar-denominated commodities prices.
Gold for December delivery fell $19, or 2.5%, to $749 an ounce on the Comex division of the New York Mercantile Exchange, breaking the $750 level for the first time since Sept. 11. Gold has fallen nine out of the past 10 trading sessions.
December copper slumped 12.85 cents, or 6.4%, to $1.8784 a pound. The metal has dropped 38% so far this year, heading for the biggest yearly percentage drop since 1988, when trading data first became available on the Nymex.
Copper is heavily used in cars, homes and appliances and is seen as an economic barometer. See Commodities Corner.
Investors are selling and the market is seeing "declining crude, pessimistic equities, and declining commodities" at the same time, said Jon Nadler, senior analyst at Kitco Bullion Dealers.
Investment funds that were under margin calls were forced to sell even their "most desired assets such as precious metals," said Peter Spina, president of GoldSeek.com. There could be "more victims of the fund collapse and more forced liquidations."
In the equity market, major indexes in Asia and Europe fell sharply lower Wednesday, while U.S. stocks also slumped. See Market Snapshot.
Crude futures tumbled as much as 6% to the lowest in more than 16 months. Lower crude prices ease inflation concerns and diminish gold's appeal as a hedge against rising prices. See Futures Movers.
On currencies, the dollar continued its rise against the euro, with the European currency trading below $1.3 for the first time since February 2007. The British pound fell to the weakest against the dollar in five years. See Currencies.
A strengthening dollar tends to reduce gold's appeal as an alternative investment.
Gold ETFs
On exchange-traded funds, gold in the SPDR Gold Trust, the largest gold ETF, stood at 755.64 tons Tuesday, 0.61 tons lower than Monday, according to the latest data from the fund. Gold at SPDR hit record high of 770.64 tons on Oct. 10.
Elsewhere, December silver lost 2.7% to $9.80 an ounce. January platinum slid 3.5% to $860.10 an ounce, and December palladium fell 2.3% to $178.90 an ounce.
In spot trading, the London gold-fixing price -- used as a benchmark for gold for immediate delivery -- stood at $744 an ounce Wednesday afternoon local time, down $28 from Tuesday afternoon.
