While the equities markets are taking a nosedive on Thursday, the commodities asset class, including gold and silver exchange traded funds (ETFs), have been dragged down along with the markets, mirroring the broad market sell-off of 2008.
Gold contracts for December delivery dropped below $1,750 an ounce, a four-week low, while silver contracts for December delivery fell more than 8%, slipping close to $37 an ounce, reports Matt Day for The Wall Street Journal.
“You got to a point today when [losses across markets]accelerated, that people will be liquidating whatever they can,” Frank Lesh, a broker with FuturePath Trading, said.
On Wednesday, gold prices began falling after news of the Fed’s $400 billion plan to increase its holding of long-term Treasuries. However, the Fed’s warning of “significant downside risks” to the economy should have helped increase gold’s appeal as a hedge, analysts said.