SPDR Gold Shares (NYSEArca: GLD) was down 4% and iShares Silver Trust (NYSEArca: SLV) plunged over 6% Thursday morning Federal Reserve Chairman Ben Bernanke said the central bank may pull back on economic stimulus this year if the economy and job market continue to improve.
Gold prices fell below $1,300 an ounce for the first time in nearly three years.
“The combination of Fed tapering, a spike in nominal yields and a stronger dollar has put gold under some considerable pressure,” said Ole Hansen, the head of commodity strategy at Saxo Bank, in a Bloomberg report.
GLD, the largest bullion-backed ETF, was down nearly 20% year to date, as of Wednesday’s close. The gold ETF traded twice its normal daily volume on Wednesday, “something you don’t see very often in a name like that,” said Chris Hempstead at WallachBeth Capital.
The gold fund currently holds 99.9.6 metric tons of gold, or $44.1 billion of assets. It started the year with about 1,351 metric tons of gold and $72.2 billion of assets. [Gold ETFs Fall to Key Support Level Before Fed]