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