Mexico’s proposed higher mining royalties could block nearly $7bn in investments
The Mexican government proposed raising mining royalties under the argument that metal prices have risen in recent years.
UPDATE: Gold plummets again Friday – down $172 since Monday
Gold could not escape the carnage on global financial markets on Thursday as the growing panic about the spread of coronavirus infections outside China saw the precious metal suffer one of its worst one-day drops on record.
Gold for delivery in April dropped at the open on the Comex market in New York and kept declining – hitting a day low of $1,560.40 an ounce just before midday, down $81.90 an ounce or 5% compared to Wednesday’s close.
In early afternoon trade the price climbed back above the $1,600 level, before weakening again to trade $70 down by 4:30pm with 55 million ounces of gold changing hands.
On Monday gold hit a seven-year high of $1,704.30 an ounce and remains up $37 year-to-date on the back of record-breaking ETF buying. Global gold-backed ETFs had $4.9 billion or 84.5 tonnes of net inflows in February, boosting holdings to new all-time highs of 3,033 tonnes.
Thursday was the biggest intra-day drop in the price since April 15, 2013 when gold was also trading in the mid-$1,500s. Gold ended that day more than $87 below the previous closing – and never recovered on its way to $1,050 an ounce three years later.
In that session, 10 million ounces traded within 30 minutes – described as a “shock and awe” trading strategy by a short seller.
Gold hit a record $1,909 an ounce intra-day on 23 August 2011, but the next day suffered one of its few triple digit one-day losses when it plummeted $105, ending the week down more than 10% from the all-time high.
Adjusted for inflation, gold’s highest price point ever was on January 21, 1980 when the precious metal hit $850, only to plunge the very next day to $737.50, a 13% fall.
The biggest fall in percentage terms came in February 1983, when the yellow metal fell from $475 to $408.50 over two days, a 14% decline.
