Is there a sell-off in gold emerging after Comex futures suffered their biggest daily loss for more than seven years, while silver had its biggest slump in 9 years?
The size of the falls sent investors reeling as those holding profits sold and those who had just bought in to both metals in recent weeks abandoned their positions to limit losses.
Gold fell more than $US23 an ounce in after-hours trading (the price was down $US93 in the regular session) adding to the impression of panic selling.
Analysts said a lot of the selling seemed to be coming from small day traders attracted into gold and silver by the big gains in the past month or so.
In many respects, it was a shakeout of speculative positions that snowballed and took traders by surprise. A rise in US bond yields didn’t help with the yield on the key 10-year security rising back over 0.60% (it was there several weeks ago) to end the session at 0.646%.
As a result watch for a shakeout among Australian gold miners today in the wake of the Comex plunge in New York that saw gold futures lose more than $US100 which saw and settle back under $US1,900 an ounce – and keep falling.
The Comex December gold contract fell $US93.40, or 4.58%, to settle at $1,946.30 an ounce and then kept falling in after-hours trading to be down $US116 an ounce – or more than 5.7%.
In dollar terms, it was the largest fall for gold since April 15, 2013, while in percentage terms it was the biggest drop since March this year.
In fact the after-hours slide had all the hallmarks of a sell-off by nervous investors trying to get out their positions. Talk of a stalemate in the talks between democrats, Republicans, and the White House on a new stimulus package also knocked confidence, especially on Wall Street.
Comex silver also slumped – losing 11% or more or more than $US3 an ounce in the biggest fall in nine years.
September silver fell $US3.21, or 11%, to end at $US26.049 an ounce after surging by nearly 6.3% Monday.
Silver’s plunge was the sharpest daily dollar fall since Sept. 23, 2011, and the largest daily percentage drop since March 16 of this year.
Platinum also slumped, losing 3.1% while palladium also sold off, dropping more than 4% in the regular session. Both saw after-hours losses and platinum was down 5.5% just before 7 am and palladium’s losses had jumped to more than 7.7%.
Comex September copper rose 0.5% to $US2.8755 a pound in regular trading but shed half a percent in early Asian dealings.
Claims by Russia to have developed and introduced the first COVID-19 vaccine drove the sell-off as did a rise in bond yields in the wake of the news. US analysts though pointed out that less than 80 people had been tested with the vaccine which had yet to go through important phase 3 trials.
The percentage loss for the session was the largest for a most-active contract since March 13, when prices dropped 4.63%, according to FactSet data.
Gold slump saw other commodities such as oil lose ground, while Wall Street went from being in the green to losses by the close as investors again sold tech stocks in afternoon trading as reports emerged of a slowdown in sales of Apple phones in China.
The Dow fell 104.53 points, or 0.38%, to 27,686.91, the S&P 500 lost 26.78 points, or 0.80%, to 3,333.69 and the Nasdaq shed 185.53 points, or 1.69%, to 10,782.82.
ASX 24 trading showed a 5 point rise at 7 am Sydney time, which won’t last as the sell-off in gold sends mining shares lower.
Oil futures turned lower in late trading. West Texas Intermediate (WTI) crude for September delivery fell 33 cents, or 0.8%, to settle at $US41.61 a barrel in New York, while October Brent crude lost 49 cents, or 1.1%, at $44.50 a barrel in Europe.
WTI lost a few cents more in early Asian dealings.
WTI and Brent saw intraday highs at $US42.94 and $US45.79, respectively, on Tuesday. Settlements around those levels would have been the highest since early March, according to FactSet data.
Iron ore prices rose again – topping $US121 level for 62% Fe fines delivered to northern China. The price settled at $US121.09 a tonne, up $US1.88 a tonne.