A strengthening greenback, better-than-expected economic data and selling by technical traders conspired to send gold prices skidding again Tuesday.
Benchmark bullion futures were sliding $39.90 at $881.60 an ounce in recent action on the Comex division of the New York Mercantile Exchange.
The two bullion exchange-traded funds that hold bars of gold,
streetTracks Gold Shares
iShares Comex Gold Trust
, were off 3.2% and 3.4%, respectively.
"It was only a matter of time before we had a selloff like this," says Carlos Sanchez, a precious metals analyst at New York-based specialty research firm CPM Group.
After languishing around $670 an ounce for most of last summer, gold prices hit an intraday record high of $1,033.90 an ounce March 17. Since then, the price has retreated almost 14%.
Sanchez points to profit-taking as a prime driver in the massive volatility in gold prices over the past few weeks. Also prompting the slide has been a relatively robust dollar. On the technical analysis side of things, chart watchers say the price has blasted through multiple support levels.
Andy Montano, director of precious metals at Toronto-based bullion bank ScotiaMocatta, says critical trend-line support at around $909 was breached late Monday, followed by a break of further support at about $905 early Tuesday.
Tuesday morning's fair economic news then weighed even more heavily and pushed prices down through the 100-day moving average at around $882.
The precious metals stocks were taking a beating, with the Amex Gold Bugs Index, which tracks a basket of gold and silver miners, down 4.5% in recent action.
was off 3.5%, while
was down 2.7%.
Gold Star Resoures
were losing 2.3% and 4.5%, respectively.
was losing 2.6%, and
was down 3.4%.
In currencies, one euro was buying $1.5577 vs. $1.5782 Monday. The dollar was buying 101.68 Japanese yen, up from 99.7 yen. The British pound was also losing value against the dollar, with one pound selling for $1.9746 vs. $1.9827.
The currency exchange-traded funds were moving in line with action in the foreign-exchange market.
CurrencyShares Euro Trust
was off 1.2%, while the
CurrencyShares Japanese Yen Trust
was down about 1.7%.
CurrencyShares British Pound Sterling
was down about 0.5%.