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Forexpros – Gold futures plunged the most in two weeks on European Central Bank President Mario Draghi’s comments that he does not plan on purchasing bonds to assist ailing euro zone economies.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1714.65 a troy ounce during late U.S. trade, dropping 1.74%.
It earlier fell to a low of USD1708.05 a troy ounce and hit a high of USD1746.25 during the session.
Gold futures were likely to find support at USD1704.79 a troy ounce and resistance exists at USD1717.99.
For much of the last year, investors typical reaction to bad news from Europe was to buy gold boosting the safe haven appeal of the yellow metal, but this correlation has unraveled recently. Instead gold futures have moved largely in line with other commodities and risk sensitive assets over the past month, with investors preferring the relative safety of the U.S. dollar.
Matthew Zeman, a strategist at Chicago based Kingsview Financial, explained the gold plunge to Bloomberg, “The market is once again completely focused on what’s going on in the euro zone. Gold has been acting like any other risk asset. When people go into risk-off mode, gold suffers the consequences.”
The euro traded sharply lower against the U.S. dollar, while the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was higher by 0.51% to trade at 78.88.
Elsewhere on the Comex, silver for March delivery cratered 2.98% to trade at USD31.65 a troy ounce, while copper for March delivery gave back 1.69% to trade at USD3.49 a pound. &nb
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