Daily Gold Update

Source: Marketwatch

San Francisco— Gold futures skidded nearly 5% Wednesday, sinking below the $1,600 level for the first time in nearly three months, as a drop in the euro signaled a new level of anxiety about the region�s debt crisis and investors sought cash as the safest asset. The decline blew the yellow metal past some long-held technical levels, which then exacerbated the selloff. Silver futures, which often shadow gold�s moves, closed down 7%, copper lost nearly 5% and palladium sank almost 7%. It was the first time gold had lost grip on $1,600 since late September.

A combination of factors sent gold prices lower, with concerns over Europe at the forefront. But in contrast to long stretches of the past two years, investors have been choosing dollar-denominated cash over gold in recent weeks. �It�s the never-ending European debt crisis still playing out, combined with some year-end profit-taking and a weakening of the euro,� said Jeff Wright, metals and mining analyst at Global Hunter Securities. �A number of funds are rotating into money-market funds in the U.S. It�s safe and they don�t have volatility,� he added. See full story.