Gold and silver followed stocks and bonds south on Tuesday as almost all financial markets slumped.
In recent weeks, metals prices have benefited from concern about the economy and increased demand for silver. But prices dipped Tuesday when they hit predetermined levels that triggered selling programs, according to metals analysts.
The sell-off dragged down local mining stocks, which had rallied with metals prices this year.
Spot gold prices dropped $6.20 to $399.10 an ounce, while silver fell 19 cents to $5.52 on the New York Commodities Exchange on Tuesday.
Earlier this month, gold and silver prices were at some of the highest levels in five years, but the markets easily can give up those gains with the selling programs, said Ted Kempf, analyst with the CPM Group Ltd. in New York.
Tuesday’s drop seems even more unusual because it came as the stock and bond markets plunged. Gold and silver typically counter moves in those markets, he said.
However, the outlook for both metals remains strong, he said.
When silver futures contracts reach delivery dates later this month, silver should rebound, Kempf said. With demand for silver greater than supply, physical delivery of the silver should rekindle the market, he said. , DataTimes MEMO: This sidebar appeared with the story: MINING STOCKS SLUMP Local mining stocks took a hit Tuesday. Hecla Mining Co. dropped 13 cents to $8.38. Pegasus Gold Inc. dropped a dollar to $15 a share. Coeur d’Alene Mines Corp. dropped $1.13 to $22.75. Gold Reserve Corp. bucked the trend and finished up 88 cents at $8.88. Asarco Inc. closed down 50 cents at $29.50. Sunshine Mining & Refining Co. dropped 3 cents to $1.50.