Gold and other precious metals fell backwards on Tuesday as oil dipped below $60 a barrel. New York silver, gold and platinum futures fell 4.1 percent, 1.8 percent and 3.9 percent, respectively.
December crude-oil sank $3.08, or 4.9 percent, to finally settle at $59.33 a barrel — its lowest level since March of 2007. The contract reached as low as $58.32. Concerns over a poor global economy curtailing demand was an often cited reason for today’s drop.
December silver plunged 41.5 cents to end at $9.805 an ounce.
January platinum fell $33.30 to settle at $826.60 an ounce.
Gold for December lost $13.70 to close to $732.80 an ounce. Its intraday low was $725.50.
"Precious metals opened lower, after yesterday’s Beijing spending plan proved to be no more than hot and sour soup. Hot at first, as commodity speculators saw redemption in the package. Sour after a while, when the same crowd decided that the program may be insufficient to halt the global slide," said senior analyst Jon Nadler at Kitco Bullion Dealers.
"Liquidations and risk-aversion are back on the radar. The recessionary/deflationary trend is keeping players parked on piles of cash for the moment," added Nadler.
Gold, considered a hedge during times of high inflation and economic uncertainty, tends to follow oil and move opposite to the U.S. dollar. A rising greenback makes dollar-denominated commodities, like bullion, more expensive for holders of other world currencies. When prices are falling and economic activities are shrinking, gold prices tend to move lower.