Gold Gets Hammered

Gold Gets Hammered

Jessica Menton | May 03, 2012 | 1min:51sec <p>Things are not going well for gold ... to put it mildly. Today the yellow metal booked its biggest one-day drop in a month. Gold prices fell hard after an economic report that the U.S. service sector fell last month and another report that showed weaker employment.</p>
<p>Things were rough for gold outside the U.S. too. India's currency has fallen hard lately and that has made gold expensive for people in the world's second-largest country. In fact ... gold hit an all-time record high today in India. That's cutting down on demand for gold in India ... which is the world's largest buyer of gold.</p>
<p>Meanwhile in Europe ... the decision today by the European Central Bank also hurt gold. The E-C-B held a key interest rate steady at 1 percent. The thing that seemed to weigh on gold prices was the press conference after the E-C-B announced its interest rate decision. The head of the E-C-B made comments that really killed any hope of monetary easing ... which also means money printing ... and without more monetary easing ... the price of gold had to go down ... at least in terms of euros.</p>
<p>The effect of today's developments on shares of gold mining companies was disastrous. The world's biggest gold miner ... Barrick Gold ... lost 3.3 percent of its value. Mind you ... this is a well-run ... profitable company. Another big company named New Gold plunged 6.8 percent. </p>