Gold futures have taken another beating, dropping more than $100 per ounce amid a downturn on financial markets shaken by global uncertainty.
Bullion ended Friday’s session below US$1,700 per ounce for the first time since early August. Gold futures for December delivery fell $101.90 to US$1,639.80.
The slide wraps a week that saw the price of gold drop by nearly 10%. Bullion futures passed several technical marks that triggered more selling Friday.
Some investors were forced to sell gold to raise money for margin calls as stock and commodity prices continue to tumble amid fear that another recession is increasingly likely.
“It’s a vicious circle … and there are no investors stepping up to buy the gold because they realize that gold is like any other commodity,” said Azim Hajee, senior trader at MF Capital Canada.
Gold has been on a upwards trajectory throughout much of the year, making several enthusiastic climbs and reaching a record of $1,876 earlier this month.
The price of gold, and many other commodities backed off as hedge funds engaged in strategic selling.
Liquidity is also walking away from emerging markets for the moment, although those making the play concede flat markets in Europe and North America don’t leave many other options for chasing returns.
European stocks began to rebound from two-year lows but U.S. futures showed zero oomph in early trading. Overall yesterday’s G-20 assurances have provided little support to markets.