Gold Tumbles on Rumors, Dollar's Strength
Gold prices plunged yesterday as a strong dollar and rumors of heavy selling by the Saudi Arabian Monetary Agency panicked the market.</br></br>Spot gold prices on the New York Commodities Exchange fell $23.10 an ounce yesterday to close at $365.80-the lowest price in six months.</br></br>Industry experts said the sell-off may have been spurred by the Saudi government, which is rumored to be liquidating 2 million ounces of the metal. However, some believe that the Japanese, who have been hard hit by plunging stock prices in the past two weeks, and the Soviets, who are attempting to bolster their economy, also may have been selling gold.</br></br>"There was heavy movement out of gold in the Middle East," said George Anagnos, director of market research for the New York Commodity Exchange. "Rumors about the Saudis {liquidating gold} were widespread, but whether they were acting for themselves or as a conduit for someone else is not clear."</br></br>The gold market, which had staged a brief rally between October and March, was susceptible to a heavy sell-off, Anagnos added. The metal's rise last year was largely due to inflation fears, a weak dollar and general worries about the economy. But those factors have changed.