Daily Gold Update

Source: Marketwatch

San Francisco— Gold futures ended 2.6% lower Tuesday, their worst one-day drop since early July, as traders reacted to a jump in the dollar on the back of U.S. official comments and to China�s surprise interest-rate hike. Gold for December delivery retreated $36.10 to $1,336 an ounce, its lowest close since Oct. 7. December silver also dropped 2.6% to $23.78 an ounce, its lowest settlement since Oct. 12. Copper stumbled 2.5%. The gold contract earlier hit a low of $1,332.50 an ounce, as the market viewed developments in Beijing and Washington as bearish for the precious metal and for commodities in general.

�People have been calling for a selloff in gold for some time, and this is it,� said Matt Zeman, a trader at LaSalle Futures Group in Chicago. �Bad news overnight gave people … a very good excuse to dump gold and take profits.� Gold may be in for tougher days ahead, but the rally in the dollar is likely short-lived and a correction for gold, which has hit a string of record highs since early September, would be healthy, he added. Late Monday, Treasury Secretary Timothy Geithner pledged the U.S. government wouldn�t devalue the dollar and said that Washington will work to �preserve confidence� in the greenback. See full story.