Gold slumps and platinum falls by most ever amid hunt for cash
LONDON – Precious metals took another beating on concerns that a wave of emergency stimulus measures by central banks won’t be enough to improve a rapidly deteriorating economic outlook.
Gold, coming off the biggest weekly drop in almost four decades, extended losses below $1 500/oz as market sentiment soured even after further emergency moves by the Federal Reserve. Platinum tumbled the most on record and silver fell the most since 2011.
The gold market is caught between demand for a haven and a rush to raise cash and cover losses in other markets. While retail dealers from Singapore to the UK recently saw a spike in demand for precious metals, gold exchange-traded funds had their biggest outflow since 2016 on Friday, data compiled by Bloomberg show.
“We are in a scenario where investors are selling whatever they can,” said Carlo Alberto De Casa, a chief analyst at ActivTrades.
Spot gold dropped as much as 4.2% to $1,465.40 an ounce, reversing earlier gains. The metal lost 8.6% last week, the most since 1983.
The Fed on Sunday slashed borrowing costs to near zero and promised to boost its bond holdings by at least $700-billion, while other central banks have also dramatically stepped up efforts to support economies from the coronavirus crisis.
“Easing is not the medicine as the stock market has clearly signaled,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S. Still, gold “will eventually move higher given the inflationary impact of current and future decisions taken by governments around the world.”
OTHER PRECIOUS METALS
Spot silver fell 14% to $12.6133 an ounce, touching the lowest since 2009.
Platinum fell as much as 26% to $564 an ounce, hitting the lowest since 2002.
Palladium was down 10% to $1 626.53 an ounce, reaching the lowest since September.
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