Gold-related exchange traded funds were tarnished Tuesday as a risk-on sentiment helped drive growth assets and weighed on safe-haven investments.
The SPDR Gold Shares (NYSEArca: GLD) fell 2.8% Tuesday as Comex gold futures dropped 2.9% to $1,204.1 per ounce.
Meanwhile, the Market Vectors Gold Miners ETF (NYSEArca: GDX), the largest and most heavily traded gold miners ETF, plunged 8.0% on the weaker bullion.
Gold-related assets have been rallying as global volatility helped support safe-haven investments and a weakening U.S. dollar helped prop up the USD-denominated hard asset.
However, the precious metal is seeing prices fall off as investors dive back into riskier segments of the market.
“It was actually quite positive that gold behaved like a safe haven again, and that showed that in times when there is a lot of volatility in equity markets, gold is benefiting from that,” Capital Economics analyst Simona Gambarini told Fox Business. “(But) we’re not surprised by the correction. Gold is probably going to fall further if the situation improves in global equity markets. If the panic subsides, it is probably going to fall to $1,150.”