Gold prices dropped sharply Wednesday after a strong U.S. durable goods report, profit-taking by investors and encouraging news from the Congressional Budget Office about the deficit.
The Commerce Department said orders for durable goods orders jumped 4 percent last month after a 1.3 percent drop in June. Analysts were looking for a 2 percent rise. the report eased fears the economy was slipping back into recession, after a series of weak sentiment surveys.
It's consistent with the idea of positive growth but not especially strong. The underlying trend is certainly good, Scott Brown, chief economist at Raymond James in St. Petersburg in Florida, told Reuters.
Gold investors also sold off after the yellow metal hit a nominal record Tuesday of $1,917.90 per ounce.
Meanwhile, Congressional Budget Office said the recent budget deal will slice projected budget deficits nearly in half over the next 10 years.
The price of gold for December delivery, the most actively traded contract on the CME Comex division of the New York Mercantile Exchange, fell 4.3 percent to $1,780.40 per ounce. Silver also plunged, down nearly 4 percent.
Spot gold dropped to $1,772.91 and spot silver was selling at $40.40.
The positive economic news also spurred a sell-off in U.S. Treasuries with the 10-year bond posting an interest rate hike to 2.199 percent. Interest rates on bonds move in the opposite direction of the price.