Gold and silver exchange traded funds were down sharply Thursday after new European Central Bank President Mario Draghi signaled the ECB wouldn’t buy bonds to ease the debt crisis and help the economy.

The ECB did cut interest rates by a quarter-point as expected and announced lower reserve requirements for banks. [ETFs See Big Swings on ECB News]

Gold prices fell the most in over two weeks, Bloomberg reported Thursday. “The market is once again completely focused on what’s going on in the Eurozone,” Matthew Zeman, a strategist at Kingsview Financial, said in the report. “Gold has been acting like any other risk asset. When people go into risk-off mode, gold suffers the consequences, like everything else, while the dollar and treasuries benefit.”

Some investors have been loading up on gold and precious metals after the Federal Reserve and other central banks recently took steps to  alleviate dollar funding pressure for European banks. There has also been speculation the ECB and European leaders would announce more easing measures this week, leading to further currency debasement and higher precious metals prices.

SPDR Gold Shares (NYSEArca: GLD) is down 8.05% over the past three months, while SPDR S&P 500 ETF (NYSEArca: SPY) is up 8.46% over the last three months, according to Morningstar data.

Gold may bring in safe-haven investments when the equities markets experience another round of heavy selling, writes Chris Dieterich for WSJ’s MarketBeat.

Typically, gold does tend to outperform when equity moves lower, or at least sharply lower,” Katie Stockton, chief market technician at MKM Partners, said in the article. “August took us below important support levels in major indices across the world.”

Ryan Detrick, Senior Technical strategist at Schaeffer’s Investment Research, believes the increased use of put options on GLD are being coupled with more long positions institutional investors are taking on gold, which mirrors previous periods of technical strength for GLD, namely in early August.

“Institutions are using those puts as hedges, and we expect this pattern to continue,” Detrick said in the article. “To us, it looks like we’re seeing signs for a pretty good size bounce for gold in the short term.”

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