Chart: Which countries are falling behind in gold mine production
India tops the global ranking with demand nearly 50 times that of its mined supply.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery on Tuesday suffered its worst trading session in months, dropping to a near 3-month low.
In afternoon trade gold was changing hands for $1,265.20 an ounce, down more than $22 an ounce or 1.7% compared to yesterday’s closing price.
The metal hit a day low of $1,263.10 in morning trade, the lowest since June 12. The 2014 low for gold is $1,244 reached June 2.
The latest retreat in the price which pares the metal’s gains for the year to just under 5% comes on the back of a surging dollar.
The US currency hit a year high against the euro on Tuesday, boosted by data showing manufacturing activity in the country rose to a three year high in August. Gold and the dollar usually move in opposite directions.
At the same time euro-zone investors looking for some wealth preservation and currency hedging as the bloc’s central bank prepares its own version of the US’s quantitative easing program are sitting pretty.
Year-to-date, the gold-euro cross has risen 10.5% compared to the 5% gain in gold in US dollar terms.
Safe haven buying spurred by the turmoil in Ukraine and Iraq, also appears to have waned.
Reuters quotes Ross Norman, CEO of bullion broker Sharps Pixley:
“It’s when the dollar hits big numbers that gold gets punished and this is clearly one of those moments.
“There is a lot to be concerned about on the political and economic front (but) people tend to get inured to the idea of bad news and it doesn’t affect them anymore.”
Silver futures for December delivery also retreated sharply, falling 1.5% to $19.19 an ounce in afternoon trade after touching $19.11 earlier in the day, the lowest since June 10.
