Gold prices plunge to 13-month low

Thursday, October 23, 2008

NEW YORK — Gold prices collapsed Wednesday, plunging to a 13-month low as a stronger dollar and growing fears of a global recession spurred investors to yank money out of commodities.

A barrage of worrisome corporate earnings has deepened investors' pessimism about the direction of the economy, prompting them to shift funds into less risky assets like government bonds. At the same time, a sharply stronger dollar is feeding selling of commodities bought as a hedge against inflation and weakness in the U.S. currency.

Gold for December delivery fell $32.80 to settle at $735.20 an ounce on the New York Mercantile Exchange, after earlier dipping to $720, the lowest level since Sept. 4, 2007.

Other precious metals also tumbled. December silver fell 61.5 cents to settle at $9.46 an ounce on the Nymex, while December copper dropped 14.15 cents to settle at $1.8655 a pound.

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