Gold futures fell nearly $100 Wednesday before slightly regaining grounds, weighed by year-end profit-taking and a further drop in the euro. The European currency is trading at its lowest against the dollar, which signals a new level of anxiety about the region’s sovereign-debt crisis.
Today’s selloff blew the yellow metal past some long-held technical levels. Gold for February delivery dropped $73.80 an ounce, or 4.6%, at $1,586.90.
Silver futures were down 7%. Copper lost nearly 5%, while palladium sank 7%.
In the U.S., the Federal Reserve decided today to keep interest rates unchanged and to avoid new monetary-stimulus programs amid a slightly improving economic outlook. This decision prompted the end of a speculation of more quantitative easing, that is weighing on the dollar and feeding demand for gold during the past three years.
The trading calls in precious metals are now largely focused on economic developments in Europe.
The euro dropped below the key $1.30 level against the dollar, down more than 1%. The U.S. dollar’s rise erodes the yellow metal’s value as an alternative to paper currencies.
Gold has fallen more than 9% this month.
