Gold plunges on global woes
Page 6
2008-11-14 12:50 AM
Gold prices plunged Wednesday as investors, fearful that a prolonged economic downturn will result in a sharp drop in demand for basic materials, continued their exodus from commodities. Investors have fled both commodities and stocks amid a worsening global economic crisis.

"The amount of money leaving the (commodities) niche has been significant," said Jon Nadler, senior analyst at Kitco Bullion Dealers Montreal. "The crisis that has been unfolding and the contagion that has spread globally has basically shown most of the fund participants in the commodities niche that the exit door was the quickest solution."

Stark signs that consumers are curtailing their spending have left investors fearful that demand for commodities will continue to be weak well into next year. On Wednesday, department store owner Macy's Inc. reported a US$44 million loss for the third quarter as sales fell more than 7 percent.

And just days after rival Circuit City Stores Inc. filed for bankruptcy protection, consumer electronics chain Best Buy Co. slashed its 2009 guidance and said it was being hampered by the worst retail environment in its 42-year history.

Gold for December delivery dropped US$14.50 to settle at US$718.30 an ounce on the New York Mercantile Exchange. The contract has fallen 2.2 percent this week. December silver tumbled US$0.32 to US$9.480 an ounce.

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