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Even gold is no haven for investors rocked by global market rout
[NEW YORK] Gold joined other markets on their way down as investors spooked by a global equity rout cashed in on bullion to cover losses from other assets.
Bullion fell for a third day, poised for its worst streak of losses since the end of February, with strength in the dollar also curbing the precious metal's appeal as a haven for holders of other currencies.
Futures for April slumped as much as 3.5 per cent to US$1,585.40 an ounce on the Comex in New York.
"It's basically just sell what you can to cover," Ryan Mckay, an analyst at TD Securities, said by phone Thursday.
US equities plunged as much 8 per cent, before paring the drop below 7 per cent, with trading settling into a range after an initial bout of selling triggered a 15-minute NYSE-mandated halt. Trading will stop again if losses reach 13 per cent any time before 3.25 pm. European stocks tumbled 10 per cent in the biggest rout since 2008. The 10-year Treasury yield slid to 0.65 per cent.
The dollar advanced by 1.3 per cent against a basket of currencies. Investors are rushing to the greenback amid the massive selloff in the US equities.
"Investors that bought gold as safe haven would probably be very nervous because of the price volatility and because prices have weakened when stocks have sold off," Georgette Boele, a precious metal strategist at ABN Amro said. "Gold as safe haven is really tested again."