Shares of miners of precious metals sank Monday as prices for gold and silver plummeted to their lowest levels in more than two years.
The gold sell-off started Friday when the U.S. government reported that wholesale prices fell in March by the most in 10 months. Investors had been buying gold in anticipation of a pickup in inflation. With prices now falling, the attraction of the metal as an alternative investment has waned.
The gold market was also rattled by a proposal last week that Cyprus sell some of its gold reserves to support its banks. Traders worry that Spain, Italy and other weak European countries might follow suit, flooding the market with excess supply just as demand for the metal is weakening.
The price of gold is trading below $1,400 an ounce for the first time since February 2011. Gold peaked at $1,900 an ounce in September 2011 during the market turmoil that followed a downgrade to the U.S. government's credit rating.
Gold fell 9.3 percent to $1,361.10. Prices of other precious metals also dove. Silver dropped 11 percent to $23.361 — hitting its lowest price since October 2010 — and platinum slid 4.8 percent to $1,425.80.
Shares of several miners fell to multi-year lows.
Barrick Gold Corp.'s shares sank 12 percent by late afternoon to $19.85, the lowest level since November 2008. Shares of Freeport-McMoRan Copper & Gold Inc. fell a new 52-week low of $29.03, and was down 8.8 percent to $29.12 in late trading. Newmont Mining Corp. shares fell 7 percent to $33.84, earlier hitting a four-year low at $33.51. Silver Wheaton Corp. shares fell 10 percent to $23.91, near an annual trading low. Kinross Gold Corp. shares sank 14 percent to $5.41, hitting their lowest point in nearly eight years. AngloGold Ashanti Ltd. shares fell 10 percent to $18.36.