Gold, Precious Metals Tumble on Japan Quake Calamity

Commodity investors lost their taste for gold in a broad sell-off that saw precious metals tumbling along with oil and other commodities in the wake of Japan’s tragedy.

Reuters reported that, while gold did not fall as much as other commodities, it was not immune to the sell-off that saw panicked commodity investors shedding a number of “safe-haven” investments. While the precious metal had risen as much as 1% on Monday, on Tuesday gold fell by 1.2% in early trading to $1,409.05. U.S. gold futures fell as well, down 1.1% to $1,409.10. Part of that, according to analysts, is attributable to investors cashing in on the metal’s previous rise of 8% in the last month on unrest in the Middle East/North Africa (MENA) region.

UBS strategist Edel Tully said in a note, "We argue that it's not unusual for gold to tumble during initial episodes of a severe broad asset sell-off. Investors sometimes have little choice but to sell the yellow metal to cover margin calls and losses elsewhere before gold then divorces itself from the downtrend." She added, "In the current climate there is more opportunity for gold to rally, as the need for safe havens accelerates."