Gold Slides Over $40

Gold prices closed a three-week low today, breaking through the $1200/ounce support level. Contracts were down over $40 to to settle at $1206.70, and have since traded lower to $1199.60. The price is a new three-week low for the metal, hitting $1212.1 on June 7, 2010.

Gold has become a safe haven for many investors against currency fluctuations, but some may be moving to back the Euro as the U.S. is shown a stubborn recovery over the last few weeks with subpar economic data. Liquidation may also be a concern right now, as market worldwide have had trouble gaining momentum. Volume has also been light this week, going into a holiday weekend in the U.S.

Some believe that the sell-off is only temporary, and the demand for gold will strengthen in in the near-term.

As a result, ETFs tracking the precious metal didn't fare well today:

• SPDR Gold Trust (NYSE: GLD) down 3.64% to $117.25;
  
  
• Market Vectors Gold Miners ETF (NYSE: GDX) down 4.81% to $49.46;
  
  
• Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) down 5.63% to $25.80; and
  
  
• iShares COMEX Gold Trust (NYSE: IAU) down 3.62% to $11.73.

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