Precious metals exchange traded funds sold off Monday along with global equities as gold futures dropped below the key level of $1,700 an ounce.
Metals ETFs were hurt by a rising dollar while stocks fell sharply on worries over Eurozone debt and on news the congressional “supercommittee” has come up empty on cutting the U.S. deficit.
Gold prices have pulled back this month with equities, raising questions over the metal’s safe-haven status as investors sell gold to cover losses elsewhere.
“It’s not behaving the way bulls would like it to behave,” said Matthew Turner of Mitsubishi Corp. in a Reuters report. “There are enormous macro issues in Europe, the U.S. and China and we don’t know how it will pan out. It’s uncertainty on top of uncertainty, and a lot of people are standing on the sidelines.”
Gold’s recent behavior has frustrated some investors because the metal, a traditional safe haven, has at times fallen with other risky assets such as stocks.
The gold ETF fell below its 50-day simple moving average on Monday.
SPDR Gold Shares (GLD)
Disclosure: Tom Lydon’s clients own GLD.