Gold Continues To Tumble As Investors Turn To Cash

Gold continued to tumble on Monday reaching a three-week low as investors continue to turn their metal holdings into cash needed to cover losses in other markets.

Worries about the global market thanks to worries over a Greek default and European credit crunch pushed investors away from equities and while gold is typically seen as a secure investment during economic turmoil investors instead decided to invest in the U.S. dollar and Japanese yen.

According to WSJ:

The contract for September delivery lost $35.70, or 2%, to settle at $1,776.40 a troy ounce on the Comex division of the New York Mercantile Exchange, the lowest ending price since Aug. 25.

Earlier in the month gold broke above $1,900 per ounce for the first time and then lost it’s momentum, falling just below $1,800 at the end of Monday’s market.

For investors gold had been a veritable “gold mine” in 2011 outperforming other markets while rising 25% through Monday’s settlement.

According to George Gero, vice president with RBC Capital Markets Global Futures

“Investors seem more interested in raising cash for now.”

The dollar has also managed to strengthen which historically deals a blow to the price of gold since the strengthening of the dollar makes it more expensive to buy futures, causing investors using other currencies to shy away.

Also sliding in September was the cost of silver.