Gold drops 8%, silver off 11% in highest sell-off in 30 years

(AXcess News) Reno – The sell-off just got worse Monday after news of bombings in Boston hit the wires. The Dow Jones Industrial Average caved, losing more-than 265 points, or just shy of 1.8%. The S&P 500 took it on the shins, losing over 36 points, or 2.5%. The Nasdaq National Market gave up 78.4 points, or 2.38%.

The crux of the sell-off came after a triple-bombing report at Boston’s annual marathon, killing three people and injuring dozens. Two of the bombs went off within seconds at the finish line of the Marathon while a third was detonated at Boston’s JFK Library. A fourth device was discovered and detonated by authorities.

President Obama said that the government was doing all it could to flush out the perpatrators, but as of 7PM EST, federal authorities had no new information.

Prior to the bombing news coming to light both gold and silver tumbled to mid-morning lows of $1335 and $23, though while gold managed to recover somewhat to close at $1354, silver continued its decline, finishing the day at $22.77 for a loss of 59 cents, or 2.77%.

The $125 drop in gold was its biggest one-day decline ever.

Friday, commodity pundits said Cyprus was being pressured to sell gold reserves and that it was pressuring commodity prices, Monday, China’s disappointing economic news was said to add to the price squeeze, yet the underlying culprit appears more to be gold contracts, with the same true for silver. Both precious metals saw contract call rates drop all day and that forced investors put up more cash or sell. Many found it cheaper to get out of gold and silver altogether.

The stage is now set for a continuing decline, says AXcess News’ financial reporter, AlanFein. “If the market opens Tuesday and the feds have no additional information on the Boston bombing, the economic news overhanging the market will only continue to worry investors – both in stocks and commodities. That in turn is likely to pressure precious metals prices further, ” said Fein.

After a 12-year bull market in gold, it appears the bears are now taking center stage. Gold closed Monday down nearly $550 from its all-time high of $1920 reached in September, 2011. Trading volume set a new record of over 700, 000 lots, nearly three-times the 30 day average.

Gold stocks also tumbled with investors in both silver and gold companies wishing they’d sold off last week when it still looked like a bull market. The Gold Composite lost 4.14%, while the Silver Composite faired even worse, losing 7.1%.

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