Silver plunges 16%; copper also lower as global selloff continues
By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Losses mounted for gold futures in the final hour of floor trading, with the metal off more than 6% as turmoil in global financial markets continued and investors rushed to sell metals positions to raise cash.
Gold for December delivery GC1Z -5.83% lost $108.30, or 6.3%, to trade at $1,632.60 an ounce on the Comex division of the New York Mercantile Exchange.
A close at these levels would be gold’s lowest since early August and land gold a weekly loss of 10%.
Gold lost 3.7% in Thursday’s session, the first full trading day after the Federal Reserve announced a plan to swap $400 billion in debt to try to help the U.S. economy.
Many investors deemed the plan insufficient and reacted by dumping stocks, commodities and other assets perceived as riskier as they dashed for cash and Treasurys.
“We had further liquidation related to margin selling from yesterday,” said Jim Steel, precious metals analyst with HSBC in New York. “The currency markets are still pressuring gold ... and funds have been going more into Treasurys and the U.S. dollar.”
Friday’s metals selloff extended to December silver SI1Z -16.78% , which was trading down $5.96, or 16%, to $30.69 an ounce, trading near session lows.
December copper HG1Z -6.12% moderated its losses, recently down less than 1 cent, or 0.1%, to $3.28 a pound.
The losses came as finance ministers and central bankers of the Group of 20 most developed economies said Thursday they would coordinate action in a bid to stop Europe’s financial crisis.
European officials pledged to “increase the flexibility” of the region’s bailout fund and to “maximize its impact” to prevent contagion. Read more about the G-20 pledge.
The selloff also came amid speculation that Greece is readying for a default and that Greek bondholders would be looking at a 50% haircut in an “orderly” default, Greek newspapers reported Friday.
Gold and other metals failed to catch any safe-haven interest from the reports, however.
“Gold has gotten so much safe-haven buying, this is just a significant correction,” Steel said, adding that stabilization could come around the $1,650-an-ounce level.
