METALS : Gold Price Turns to Lead, Drops Nearly $13
NEW YORK — Gold prices fell more than $12 Monday, driven by a drop in the price of oil and by the stalemate in the Persian Gulf. The metal was also dragged down by silver’s drop to near-14-year lows and by a fall in platinum to its cheapest level in four years.
“The market is very nervous and choppy, with people worried that if gold isn’t strengthening on the Gulf crisis now, it could go lower with the Middle East situation expected to be quiet in the short term,†a London dealer said.
The active December gold contract on the New York Commodity Exchange closed with a huge loss of $12.80 to $378.50 an ounce--its lowest since Iraq invaded Kuwait Aug. 2. The day before the takeover, gold closed at $382.40 an ounce.
The plunge in crude oil prices added momentum to the slide in inflation-sensitive gold, traders said.
With no significant developments in the Persian Gulf, oil traders chose to sell contracts on the New York Mercantile Exchange, driving prices below $38 a barrel after a rally last week to a record high of more than $41 a barrel.
Platinum and silver have industrial applications that make them more vulnerable than gold to an economic slowdown caused by a doubling of oil prices.
The January platinum delivery on the New York Mercantile Exchange closed off $22.80 to its lowest level since March, 1986, at $396.60.
Silver for December delivery on the Commodity Exchange closed down 17.7 cents to $4.178 an ounce, its lowest since 1976.
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