Gold plunged for the second straight day Monday, dropping more than 8% at midday in what was shaping up as the metal’s biggest one-day percentage decline in 30 years. Gold for April delivery, the front-month contract, was down 8.6% at $1,372.10 a troy ounce on the Comex division of the New York Mercantile Exchange at midday in New York, its lowest price in more than two years.
Traders said part of the plunge in prices was a result of investors choosing to sell gold instead of putting up more money as collateral to keep their wagers open. Traders typically put down just a small percentage of a gold contract’s full value in order to trade it, and this amount, known as margin, must be increased when prices fall.
Gold for June delivery hit a low of $1,355.30 an ounce, a decline of 9.7%, in intraday trading. The precious metal later pared losses to trade down $128.90 an ounce.