Gold set for worst two-day loss since 1983

Gold headed for its biggest two-day drop in 30 years on Monday as funds accelerated their exits from the market, and investors also cut exposure to oil, copper and grain after underwhelming Chinese growth data.

The precious metal slid further into bear territory, dropping more than $30 in a matter of minutes at one point. Losses widened to more than 6 percent at the lows as prices breached support at $1,400 per ounce after falling 5.3 percent on Friday.

Oil fared scarcely better, dropping by as much as nearly 3 percent. Other precious metals were caught in the downdraft, with silver briefly dropping 10 percent, and industrial metals plummeted, with copper hitting its lowest in over a year. In the grains market, wheat, corn and soybeans fell.

Both oil and gold have been under substantial selling pressure. Bullion has come off worst, shedding around 9.5 percent since last Monday’s close, while crude has lost about 3.5 percent.

China’s economy grew 7.7 percent in the first quarter, undershooting market expectations for an 8.0 percent expansion and frustrating investor hopes that the world’s No. 2 economy would rebound after posting its weakest growth in 13 years in 2012.

“If you want to be worried about China, there’s plenty to keep you awake at night,” said Sean Corrigan, chief investment strategist at Diapason Commodities Management in Switzerland.

Gold was already under pressure from a variety of factors, including a proposed sale of Cypriot gold holdings, and more fund-based investors headed for the exits on Monday.

Spot gold hit a two-year low at $1,384.69 an ounce.

“We have seen massive liquidation from all quarters – ETFs, funds, CTAs, specs and even Chinese and Indian physical buyers. This is a market that has only got one thing on its mind … get me out,” said David Govett, head of precious metals at Marex Spectron in London.

Brent crude oil sank below $101 a barrel to a nine-month low and was threatening to break below $100 for the first time since early July. It was down about 15 percent from this year’s peak of $119.17 reached in early February.

Prior to the latest Chinese and U.S. data, the International Energy Agency, the U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries had already lowered their global oil demand growth for 2013.

China’s weaker-than-forecast GDP growth was backed by slower increases in industrial production and fixed-asset investment, despite strong lending growth in March.

“There are questions about the trend of bottoming in China’s economy and whether it can re-accelerate above 8 percent this year in a sustainable way,” said Vishnu Varathan, market economist at Mizuho Corporate Bank in Singapore.

Gold bars are seen in this picture illustration taken at the Istanbul Gold Refinery in Istanbul March 12, 2013. REUTERS/Murad Sezer
Gold bars are seen in this picture illustration taken at the Istanbul Gold Refinery in Istanbul March 12, 2013. REUTERS/Murad Sezer

In gold, “what we now see is panic selling, perhaps triggered by the Fed’s stimulus view. The Fed has given the signal that there’s a possibility to reduce QE (quantitative easing), and that took a lot of trust out of gold,” said Dominic Schnider, an analyst at UBS Wealth Management.

“And people recognize that an environment where you have no inflation is a powerful driver to get out of the metal.”

Minutes of the U.S. Federal Reserve’s March policy meeting released last week showed some officials were keen on ending the stimulative bond-buying program this year, although those views were expressed ahead of last month’s poor non-farm payrolls data and Friday’s weak retail sales.

London copper fell to its lowest level in 1-1/2 years at $7,085 a metric ton, while aluminum hit a three-and-a-half year low.

China is the world’s biggest consumer of copper.

Soft commodities sugar, coffee and cocoa were the only commodities seemingly little affected by the market rout on Monday, with prices particularly for sugar and coffee already at low levels due to large surpluses.

 



News
Entertainment
Sports
Lifestyle
National

Humans should thank ancient Scottish fish fossils for…

By Kate KellandLONDON (Reuters) - Scientists studying fossils have discovered that the intimate act of sexual intercourse used by humans was pioneered by ancient armored…

National

Comet makes rare close pass by Mars as…

By Irene KlotzNEW YORK (Reuters) - A comet from the outer reaches of the solar system on Sunday made a rare, close pass by Mars…

Local

NYPD: Man found hanging in Brooklyn subway station

A man was found hanging inside a Brooklyn subway station on Saturday morning, police said. The man, who still had not been identified on Sunday,…

Local

Only church destroyed in 9/11 set to rebuild

St. Nicholas Greek Orthodox Church, the only house of worship destroyed during the terrorist attacks on 9/11, held a groundbreaking ceremony Saturday to start the…

Going Out

Watch home cooks try to impress Tom Colicchio…

Is what you’re making for dinner tonight good enough to serve “Top Chef” judge Tom Colicchio? That’s the standard that some of the city’s best…

Television

‘Homeland’ recap: Season 4, Episode 4 ‘Iron in…

Carrie Mathison, what are you doing?! Don’t seduce virgins! More on that later: Lots of crazy stuff went down on the "Iron in the Fire" ep of "Homeland"!

Movies

Box office: Brad Pitt kills Nazis, also Nicholas…

This weekend, Brad Pitt's second WWII movie, "Fury," rolled into the lead, while the latest Nicholas Sparks movie, "The Best of Me," got little love.

Gossip

Blake Lively's pregnancy cravings are too weird to…

Find out what Blake Lively is rumored to send husband Ryan Reynolds to the store for.

College

College football AP Top 25 rankings: Mississippi State…

College football AP Top 25 rankings: Mississippi State holds off FSU

NHL

NHL Power Rankings: Sharks, Canadiens, Blackhawks out in…

NHL Power Rankings: Sharks, Canadiens, Blackhawks out in front

NFL

DeMarco Murray carries Cowboys to win over Giants

The Giants knew they would need to stop DeMarco Murray if they were going to leave Dallas with a win. It didn't matter.

NFL

Jets trade for wide receiver Percy Harvin: Report

According to Fox Sports' Jay Glazer, the Jets have sent a conditional draft pick to the Seahawks for wide receiver Percy Harvin.

Wellbeing

Gabby Bernstein: The 3 questions I always get

For the last decade, I’ve been writing self-help books and preaching the Gospel of Gabby to audiences throughout the world. And no matter what country…

Wellbeing

Health News: 5K for lung cancer, free yoga,…

Get some fresh air to benefit lung cancer research On Friday, the first-ever Brooklyn Free to Breathe Run/Walk will take place Oct. 26 at Cadman Plaza…

Education

Can these two college students come up with…

Two Atlanta college students say they have an idea for a simple test that would quickly diagnosis the Ebola virus - and it all started…

Education

Chances are, the average college student isn't taking…

As a bachelor’s degree becomes more expensive than ever, one new report is criticizing colleges for the content of those pricey educations. The American Council…