It’s happening fast and furious. Gold, which had been on the rise for 12 years continuously, has suddenly turned out to be the favourite whipping boy of investors.
After having dropped five per cent on Friday, gold continued its dive south and slipped over nine per cent on Monday night in the global market.
It was the sharpest fall in three decades as suspecting investors got out from the precious metal, cashing out the investments.
Gold is in firm grips of bears with the sales of the yellow metal by banks being a great source of worry. Adding to the chaos is concerns over economic growth.
Gold rates
In early Asian trade at Singapore, spot gold dropped to $1,331.05 a troy ounce, while gold futures for delivery in June dropped to $1,329.40.
Meanwhile, a disappointing Chinese data that showed slowdown in economic growth in the March quarter to 7.7 per cent from 7.9 per cent in the previous one, dragged other commodities from crude oil to corn.
Also, speculation that supplies in the US increased to a 22-year high affected the market sentiment in crude oil. Brent crude oil for June contract fell to $100.39 a barrel and West Texas Intermediate (NYMEX) to $86.55.
Soyabean, crude palm oil
The oils and oilseed market is also set to dive with reports of large speculators cutting their positions on Chicago Board of Trade aiding the trend.
On CBOT, soyabean for delivery in July delivery dropped to $13.58 a bushel. On Monday, crude palm oil June futures on the Bursa Malaysia Derivatives Exchange ended lower at 2,294 ringgit ($755) per a tonne.
Short-covering
Besides traders going short in the grains market, the biggest in corn (maize) in 12 years, the market turned nervous with the closure of Ensus Bio-ethanol plant at Teesside in the UK.
Corn for July contracts were down at $6.23 a bushel in early Asian trade and wheat contracts for the same month slipped to $6.97 a bushel.