Thread: Gold prices dive to $1,500 an ounce

Gold prices dive to $1,500 an ounce

Beth Belton, USA TODAY12:34 p.m. EDT April 12, 2013

Story Highlights
Gold prices trading at lowest levels since July 2011
Investors are losing confidence in precious metal as safe haven
Fears rising of an inflation spike, massive gold selling in Europe to raise cash

The price of gold plummeted Friday to its lowest level in nearly three years as economists grew increasingly worried about the economy's forward momentum heading into spring.

Precious metal investors appear to losing their confidence in gold as a safe-haven investment from the risks of inflation or a major stock market meltdown. There is also growing concern that as the beleaguered banking sector in Cyprus worsens, citizens and investors there and in other parts of the debt-laden eurozone will ratchet up gold sales to raise cash.

In midday trading Friday, gold prices were at $1,500, a price level not seen since July 2011. At their lowest, gold futures for June delivery were down $66, more than 4%, to $1,499 an ounce in Comex trading at the New York Mercantile Exchange. For the week, gold prices are down nearly 5%.

"It's pure panic bedlam on enormous volume," said Gene Arensberg, editor of the Got Gold Report told Marketwatch online financial news service.

Stock and bond investors were mostly shrugging off the big action in gold prices. Benchmark indexes were down about 0.5% or so after four straight days of gains, including two days of higher record closes the past two days for the Dow Jones industrial average and the broader Standard & Poor's 500 index.

There were no huge disappointing economic reports out Friday. A report on inflation at the wholesale level showed producer prices down 0.6% in March after a 0.7% spike in February. Excluding the impact of volatile changes in energy and food prices, wholesale prices were up 0.2% in March, the government said. And year over year, wholesale inflation has risen just 1.1%, the smallest annual increase in more than a year.

Consumer sentiment sank in April to its lowest level in nine months, according to a monthly survey conducted by Thomson Reuters news service and the University of Michigan. And retail sales posted the biggest one-month drop in nine months in March, the Commerce Department said.

Still, monthly economic reports tend to bounce around from month to month and there's no clear-cut evidence yet that the economy is going to stall in the spring despite renewed worries after the government reported one week ago that just 88,000 nonfarm jobs were added in March while the unemployment rate ticked to 7.6% from 7.7%, mostly because more people gave up and stopped looking for jobs.

http://www.usatoday.com/story/money/...ounce/2077545/

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