|ORO Y PLATA INTERNACIONAL S.A.
Gold slides as Japan crisis slams
15/04/11. Gold prices dropped to a one-month low on Tuesday, but were
well off their lows, as fear of a potential nuclear catastrophe in Japan sent
world financial markets tumbling in a flight to safety.
Bullion was caught in a global equity rout that wiped out about $650 billion
in valuations as investors dumped assets considered risky and sought the
safety of cash or government debt.
Platinum group metals also fell sharply as Japan's deepening nuclear
crisis dampened demand expectations due to plant closures and
production outages in the country's auto industry.
Total trade in U.S. metals futures rose to the highest level since late
"We have a risk-off trade going on as a result of the issues in Japan. There
has been institutional liquidation and other liquidation globally as people
are choosing to raise cash at this moment," said James Steel, chief
commodity analyst at HSBC bank.
Spot gold fell as low as $1,380.90 an ounce and was later down 2.3 percent
at $1,394.10 an ounce by 2:54 p.m. EDT (1854 GMT), notching its biggest
one-day loss in nearly 2 months.
U.S. gold futures for April delivery settled down 2.3 percent at $1,392.80 an
Silver tumbled as much as 6 percent to a low of $33.56 an ounce, and was
last down 4.2 percent at $34.33 an ounce.
Other safe havens, such as U.S. Treasuries and the Swiss franc, rallied
after Japanese stocks posted their worst two-day slide since 1987.
Japan raced to avert a catastrophe on Wednesday after an explosion at a
quake-crippled nuclear power complex sent radiation wafting into Tokyo,
prompting some people to flee the capital and others to stock up on
"High risk aversion is prompting the taking off of any risk. Even if it doesn't
seem logical to move away from gold in the current situation, risk aversion
is telling many market participants that cash is king," said Commerzbank
analyst Eugen Weinberg.
Bullion was little changed after the U.S. Federal Reserve said the economy
was gaining traction while flagging potential inflation risks from costlier
energy and food, confirming its ultra-loose monetary policy.
The Fed dedicated an unusually large portion of its policy statement to
inflation concerns surrounding a recent spike in energy and food prices,
which it said would most likely prove transitory.
LIQUIDITY IS KEY
Analysts said part of the pressure on gold stemmed from investors
cashing in on the metal's 8 percent rise in the past month on escalating
violence in the Middle East to cover losses or margin calls on their equity