New York – October gold futures fell 74.30, or 4%, to $1,784 as investors moved out of precious metals in favor of equities. The correction could be a buying opportunity, though strength in the dollar played a big role in Tuesday’s drop.
Spot gold managed to show some recovery, trading at $1,785.60 bid, though still down 43.60, or 2.38%.
But despite the corection in gold, stocks moved into the red in midday trading in New York with the Dow off 35 points, or 0.3%, at 11,141 and the S&P 500 Index giving up 4.68 points, or 0.4%, to trade at 1,157 while the Nasdaq dropped 22 points, or 0.9%, at 2,424.
The benchmark 30-year treasury note rose 0.0650 to yield 3.5420%.
Standard Bank precious metals analyst Leon Westgate said to investors in an early morning analytical note that durable goods data, if positive, would have a negative impact on gold.
“As barometers of US economic activity, this afternoon’s goods orders data could prompt some price movement,” said Westgate. “Disappointing numbers would strengthen suspicions of a possible recession, a benefit to gold and silver.”
Government data showed a 5% increase in July durable goods orders in the United States. That helped boost stocks in morning trading as investors began to unload gold positions and move back into equities.
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Tags: Gold, Gold Drops
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