The Nightmare Continues — Gold Plunges Below $1700

HONG KONG (MarketWatch) — Prices of gold and silver took a tumble in electronic trading Thursday, as gains in the wake of the Federal Reserve’s expanded monetary stimulus gave
After dropping more than $20 to a low of $1,695.50 an ounce at one point, February gold futures /quotes/zigman/4331913 GCG3 -1.28% recovered slightly to $1,701, though still down $16.90, or 1% from Wednesday’s settlement price.

Spot gold prices were at $1,699, down $12.60, or 0.7%.

Gold prices had risen $8.30 in a regular session on the Comex division of the New York Mercantile Exchange overnight after the Federal Reserve announced a new bond-buying program. The Fed also said it would keep interest rates at extremely low levels until the unemployment rate falls to 6.5%, unless inflation accelerates before then. Read MarketWatch First Take on the Fed’s announcements.


James Steel, an analyst at HSBC Securities, said the research house had noticed a pickup in macro hedge-fund buying after the Fed announcement, but that was partially offset by sales from investors, such as pension funds, endowments and insurance companies.
... [link to www.marketwatch.com]

Back at 1700 later today.