Gold prices shed as much as 3.5% throughout the session. Investors buy gold as risk protection to sell during times of disaster and that's exactly what global markets, most heavily the Japanese, are doing.
Gold for April delivery settled up from session lows but was still sunk $32.10 to $1,392.80 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as low as $1,380.70 while the spot gold price was plummeting more than $35, according to Kitco's gold index.
The list of bad headlines mounted Tuesday with investors trying to figure out what the worst case scenario for Japan could be. Prime Minister Kan announced that radiation levels near 4 exploding nuclear reactors are very high. Bank of Japan pumped another 8 trillion yen, or $98 billion, into the market. The Nikkei was down 14% during trading. On the surface gold should be rising as a safe haven investment. However, it seems investors are using gold as currency, selling it for cash during this crisis. China and India are by far the largest gold consumers in the world, and Japan saw fourth-quarter disinvestment fall 11 tons in 2010 as jewelry demand plummeted 31% in the same time frame, according to the World Gold Council. But Japan still has gold to sell. Its central bank holds 765.2 tons. That is not to say the bank is selling but just that Japan still represents a big player in the market. "I think
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV