Gold price falls 3%
Optimism pulls money out of safe haven assets
Gold and silver prices retreated Tuesday, pulling the share prices of mining companies down with them.
The February gold contract fell by the most in seven weeks, losing $44.10 an ounce, or three per cent, to close at $1,378.50 US.
The S&P/TSX global gold index fell 3.4 per cent while Agnico-Eagle Mines declined 6.4 per cent to $71.72 Cdn. Barrick Gold, the world's largest gold producer, fell 2.9 per cent to $51.59 and Kinross Gold was down 4.1 per cent to $18.14.
"We typically see profit taking after new highs are reached," said Kate Warne, Canadian market strategist at Edward Jones in St. Louis.
"The second thing is with stock markets doing better and good economic news, some of the people who thought that gold would be a good place to hide if things got worse may be deciding that they would do better investing in companies that benefit from the strong global economy," she added.
Gold prices rose by 30 per cent in 2010, for the 10th straight year.
Silver also plunged, with the March contract down 4.1 per cent to $29.86 US an ounce. Silver Wheaton shares fell six per cent to $36.65 Cdn and Pan American Silver lost 5.3 per cent to $38.78.
With files from The Canadian Press