Gold slides on deflation fears

Ben Southwood
Follow Ben
GOLD PRICES slid 1.5 per cent yesterday, as investors worried that the debt crisis in the Eurozone, combined with fiscal crisis in the US, could lead to deflation.

Some had speculated the sharp fall, the biggest for around a month, was down to a so-called “fat finger error”, but derivatives market CME denied this claim.

The fall saw spot gold fall to a low of $1,705.64 an ounce, before climbing to $1,718.60 and settling at $1,716.50 – admidst volumes around double the 250-day average.