Gold prices took a beating Tuesday, plunging nearly 2% and marking the yellow metal's worst day of the year.
June gold finished the session down $24.50, or 1.83%, to $1,303.10 an ounce. Spot gold was last quoted off $23.80 at $1,303.25.
Spot gold prices fell to a low of $1,228 an ounce intraday, but managed to claw back some gains in the afternoon. Still, even fresh Consumer Price Index (CPI) figures showing a slightly higher than expected read on inflation in March failed to goose gold prices much.
Fueling the slide was profit taking – gold hit a three-week high in the prior session. Sizeable long positions accumulated Monday as gold traded over $1,320 an ounce, and there were plenty of shorts today, Chintan Karnani, chief market analyst at Insignia Consultants in New Delhi, told MarketWatch. A huge number of stop-loss orders were triggered when gold slipped below the key $1,300 level.
Gold wasn't the only metal battered Tuesday. The pain was felt across the entire precious and basic metals markets – from copper to palladium.
"It started off with nickel," a New York trader told Kitco. "We're just having kind of a panic in thin markets."
News that tensions are again flaring up between Ukraine and Russia failed to stoke investors' fears and provide some support for safe-haven gold. Underscoring the growing geopolitical unrest simmering in the region, Ukraine's acting president launched an "anti-terrorism operation" in the besieged eastern areas Tuesday and seized an airport about 120 miles from Russia.
"It is a case of once bitten twice shy," Karnani explained. Traders took a bullish gold stance Monday on Ukraine unrest, with the yellow metal gaining 0.6%, or $8.50 an ounce, to $1,327.50.
"Now they are extra cautious going long. The rise (if any) will be slow and steady unlike the fall which was quite fast," said Karnani.
Also weighing on gold prices was a report released Tuesday from the World Gold Council — although it has some bullish news for the long-term gold outlook…