Gold has worst day in 5 years; silver drops 18%

(MarketWatch) — Gold futures notched their largest one-day percentage drop in five years, ending 5.9% lower Friday, as turmoil in global financial markets led to a rush to sell gold and other metals to raise cash.

Silver ended 18% lower, its worst in decades, while platinum stumbled 5.7% and other metals also collected a slew of low marks along the way.

Gold for December delivery  lost $101.90 to settle at $1,639.80 an ounce on the Comex division of the New York Mercantile Exchange.

That was gold’s largest one-day percentage loss since June 2006, and its largest dollar loss since Aug. 24. The settlement price was also the lowest for a most-active gold contract since Aug. 1, when it finished at $1,621.70 an ounce.

For the week, gold lost 9.7%, its worst weekly performance going back to at least the mid-1980s, according to FactSet Research Inc. Gold for September delivery, the thinly traded front-month contract, slid 9.6% for the week, the worst since Feb. 1983.

Gold lost 3.7% in Thursday’s session, the first full trading day after the Federal Reserve announced a plan to swap $400 billion in debt to try to help the U.S. economy.

Many investors deemed the plan insufficient and reacted by dumping stocks, commodities and other assets perceived as riskier as they dashed for cash and Treasurys.

That sentiment spilled over to Friday metals trading.

“We had further liquidation related to margin selling from yesterday,” said Jim Steel, precious metals analyst with HSBC in New York. “The currency markets are still pressuring gold … and funds have been going more into Treasurys and the U.S. dollar.”

Friday’s metals selloff extended to December silver , which settled $6.48 lower at $30.10 an ounce, its lowest finish since Feb. 11, when it settled at $29.99 an ounce.

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