NEW YORK (
were sinking almost $30 Wednesday as the U.S. dollar rallied.
Gold for February delivery was slipping $28.90 to $1,111.10 an ounce at the Comex division of the New York Mercantile Exchange. Prices have traded as high as $1,141.70 and as low as $1,106.80. Gold resumed its inverse correlation to the U.S. dollar after
was rising 1.08% to $78.35 as European debt fears pressured the euro. Also contributing to a dollar rally was increased speculation that
could start restricting credit.
"We're seeing some reversion to safer assets and the perceived safety of the yen and the dollar...and that's giving gold a bit of a hard time," says Nicholas Brooks, head of research and investment strategy for ETF Securities.
Gold is Overreacting
Mixed U.S. earnings and global economic recovery uncertainty is prompting investors to sell riskier commodities and buy up safer assets like currencies. Many analysts expect this trend to continue in the short term and gold prices to remain sensitive to market jitters.
"Markets are still very unsettled," argues Brooks. "A lot of investors are still trying to get a handle on what 2010 is going to be like ...
resulting in a lot of volatility
and a lot of choppy trading."
were falling 90 cents to $17.90 while copper was down 9 cents to $3.35. Even platinum ended its multi-month bull run, slipping $22.40 to $1,617.
Mining stocks, a more leveraged way to
, were also free falling.
was slipping 4.66% to $37.81 while another large-cap miner,
, was plummeting 6% to $45.52.
was down with its peers to $18.43.
Freeport McMoran Copper & Gold
were down 3.57% to $81.57 and
was sinking over 5.31% to $11.05.
was losing 4.38% to $38.99.
The popular physically backed ETF,
SPDR Gold Shares
was falling only 2.36% to $108.89. The ETF shed almost another ton on Monday as investor traded out of the gold.
Written by Alix Steel in New York
Alix joined TheStreet.com TV in February 2007. Previously, she held positions in film and theater production, management, and legal administration. Alix has a degree in communications and theater from Northwestern University.