New York – Gold fell below $600 an ounce Monday for the first time in 10 weeks on speculation that demand from investors and jewelers won’t rebound in the fourth quarter. Silver plunged more than 7 percent, leading the CRB Index of commodities to its lowest point in more than nine months.
Global demand for gold dropped in the second quarter, its third straight decline, as higher prices deterred jewelers, the biggest buyers. Gold has gained every September since 2000 as jewelers stocked up on the metal before year-end holidays. The metal is down 18 percent from a 26-year high of $732 an ounce in mid-May.
“We are in the middle of a correction,” said Daniel Vaught, a commodities analyst at A.G. Edwards & Sons Inc. in St. Louis. “Historically, traders look for a little strength from the yellow metal in September. I wonder if this year is an exception.”
Gold futures for December delivery fell $20 to close at $597.30 an ounce on the Comex division of the New York Mercantile Exchange. Prices earlier touched $589.60, their lowest since June 30.
Silver futures for December tumbled $1.055 to $11.24 an ounce. The Reuters-Jefferies CRB Index of 19 commodities fell 5.79, or 1.8 percent, to 314.60 after touching 313.78, the lowest since Nov. 30. Every commodity in the index fell, except gasoline. Natural gas, copper, sugar and corn also led the declines.
A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.
Global gold demand fell 16 percent in the second quarter, according to the producer-funded World Gold Council. Jewelers accounted for 73 percent of gold demand last year.
Gold fell below its 100-day moving average in the past two sessions, signaling that the metal may drop further.
