Gold falls to a two-year low; other commodites suffer
The beating that metal prices began taking on Friday continued on Monday, led by gold plummeting to a two-year low.
The slide began on Friday with a 5 percent plunge and suffered more losses on Monday as it closed down $140.40/oz for the day, at $1,361. It was a loss of 9.35 percent, the worst one-day loss for gold since 1983.
This turmoil in the market resulted in European mining stocks closing near an 18-month low, and all of Europe’s main equity markets finished deep in negative territory as commodity prices plunged.
The Stoxx 600 basic resources sub-index finished down 4.8 percent at 375.89, its lowest level since November 2011.
The price of gold has been on steady decline since the worst of the Great Recession passed, but this decline pushed it into bull market territory as it hit a multi-year low of $1,370.80. This came in the midst of growing concerns about global financial stability, higher inflation and disappointing economic news from China which reported gross domestic product growth of 7.7 percent compared with a year earlier in the first quarter. This was weaker than in the fourth quarter of last year and below economists’ expectations of an 8 percent expansion.
Stocks, too, were continuing a pullback that began Friday after a report on falling retail sales for March. The Standard & Poor’s 500-stock index slumped 2.3 percent, while the Dow Jones industrial average fell 1.8 percent — more than 260 points — and the Nasdaq composite index lost 2.4 percent.
Other metals also suffered. London Metal Exchange copper fell to its lowest price since October 2011 and silver dropped 10 percent to a two-and-a-half year low.
Shares in U.K.-listed gold miners fell heavily. West African gold producer Randgold Resources fell 6.67 percent and Russia's Polymetal International fell 8.3 percent and 13 percent, respectively, following the fall in the price of gold.