Analysts had quick answers after it happened, but no one saw the surprise 2.3% fall in gold prices when it happened overnight.
It was the biggest drop in gold for 2014 and came out of the blue. Gold prices had risen 7% since the start of June.
Comex August gold futures plunged more than $US30 or 2.3%, to $US1,306.70 an ounce, the biggest one-day drop for a nearby futures contract since last December.
Comex September silver fell more than 54.7 cents, or 2.6%, to $US20.91 an ounce and copper dropped 2 US cents to $US3.25 a pound on Comex.
Gold prices had their sixth straight weekly gain last week, despite a fall on Friday.
Gold had probed four-month lows near $US1,244.30 an ounce early last month, before rebounding more than 7% to just over $US1,337 last week.
From possible weak demand from India and China, to fears about the testimony this week from Fed chair, Janet Yellen before the US Congress, analysts had quick explanations for the surprise fall.
The move will hit the prices of local gold miners such as Newcrest later today.
Big gold miners such as Newmont, Goldcorp, Eldorado and Barrick Gold fell by between 2% to more than 4.4% in the wake of the gold price tumble.
Equities had a solid day with the Dow, S&P 500 and The Nasdaq all up overnight by half a per cent or more. Our market will start with a gain of more than 10 points, according to the futures market.
A better explanation might be the change in sentiment overnight with so-called ‘risk on’ investments back in favour as economic data suggested China’s economy was rebounding.
Last week’s worries about European banks also helped send gold prices higher last week. Those tensions have since eased.
