New York precious metals were violently battered downward Tuesday, as silver, gold and platinum lost 2.9 percent, 1.3 percent, and 6.7 percent, respectively. The metals followed crude-oil prices, which neared $100 per barrel on expectations OPEC would not reduce output and new forecasts showing Hurricane Ike’s aim could miss major refining operations in the Gulf.
October oil fell $3.08 to $103.26 per barrel; its lowest level since April.
December silver slid 34 cents, or 2.9 percent, to end at $11.72 an ounce.
October platinum plunged $90.80 to close to $1,262.10 an ounce.
December gold fell $10.50 to close to $792 an ounce. The yellow metal reached its lowest point earlier in the day at $780.20 an ounce — a level not seen since November of 2007.
"Fresh ten-month lows were seen in gold on Tuesday as oil prices fell further (now 50 cents under $105) following news that OPEC sees its market essentially “in balance” and will not curtail current output levels," said senior analyst Jon Nadler at Kitco Bullion Dealers.
"Indian pre-festival demand notwithstanding, gold has to prove it can stand up to fund sales that are bringing it ever closer to critical support in the $775 area. Beyond that level the $730 to $730 area presents a tempting level for the shorts to try to explore pushing the market towards," continued Nadler.
Gold generally follows oil’s direction and moves opposite to the U.S. dollar, as a weakened dollar encourages investors to buy gold, also considered a hedge or safe-haven during times of high inflation and economic uncertainty.