Gold plunges nearly 5% as dollar surges, traders cash out after record high

Gold prices sank Tuesday in their steepest one-day drop in years, sliding almost 5% as a surging US dollar and heavy profit-taking halted the precious metal’s record-setting run above $4,300 an ounce.As of noon Tuesday, gold futures were trading at $4,143.90 per troy ounce, down $215.50, or 4.94%.The decline followed Monday’s close at $4,359.40, when the metal hit a fresh all-time high.The selloff marks gold’s sharpest single-session decline since April 2013 and its first meaningful correction after a monthslong rally fueled by safe-haven buying and expectations of Federal Reserve rate cuts.Prices opened at $4,371, climbed briefly to a high of $4,393.60 — and then slid steadily through morning trading to a low of $4,090 before stabilizing.“I think it’s as simple as it’s a risk-off day after a meteoric rise,” said Stephanie Link, chief investment strategist and Portfolio Manager at Hightower Advisors.“It’s not just gold, but silver and other precious metals are down.

In the past 10 weeks, gold and silver inflows have been $34.2 billion.It’s the most ever in history.”Link called the development “pretty frothy.”The US Dollar Index strengthened nearly 0.7% Tuesday morning, its biggest rise this month.A firmer dollar makes gold more expensive for foreign buyers, often triggering sharp reversals after big rallies.The latest downturn comes just one day after gold briefly topped $4,380, capping a more than 50% year-to-date gain driven by geopolitical risk, global inflation and growing belief that the Fed is preparing to ease monetary policy by year’s end.

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