Precious metals exchange traded funds sold off Monday along with global equities as gold futures dropped below the key level of $1,700 an ounce.
SPDR Gold Shares (NYSEArca: GLD) fell 2% while iShares Silver Trust (NYSEArca: SLV) dropped nearly 5%.
Metals ETFs were hurt by a rising dollar while stocks fell sharply on worries over Eurozone debt and on news the congressional “supercommittee” has come up empty on cutting the U.S. deficit. [Stock, Metals ETFs Fall on Supercommittee Failure]
Gold prices have pulled back this month with equities, raising questions over the metal’s safe-haven status as investors sell gold to cover losses elsewhere.
“It’s not behaving the way bulls would like it to behave,” said Matthew Turner of Mitsubishi Corp. in a Reuters report. “There are enormous macro issues in Europe, the U.S. and China and we don’t know how it will pan out. It’s uncertainty on top of uncertainty, and a lot of people are standing on the sidelines.”