Precious metals and the broader market headed in opposite directions Wednesday, with gold taking its biggest single-day dive in two-and-a-half months as a February full of good economic news helped drive the price of precious metals down on the day and month as a whole.
Gold and silver mining companies took a hit Wednesday after U.S. Federal Reserve Chairman Ben Bernanke expressed optimism about the U.S. job market.
Bullion fell $80 from its high on the day, with gold for April delivery falling $77.10 to $1,711.30. The 4.3 percent drop on the most active contract on the Comex is the metal's biggest one-day price drop since mid-December.
In contrast, U.S. stock indexes fell slightly Wednesday but ended the month up. The Dow Jones Industrial Average fell 0.4 percent, closing at 12,925.07, but was up 2.5 percent for the month. The S&P 500 Index fell 0.47 percent to 1,365.68 but enjoyed a 4.1 percent gain on the month.
Major gold and silver mining companies took a dive across the board, with losses of almost 7 percent in some cases. Barrick Gold (ABX) fell $1.88 to $47.58, taking a dive shortly after Bernanke's comments around 10 a.m. Goldcorp (GG) dropped $1.55 to $48.48. Newmont Mining (NEM) also fell $2.61 to $59.39.
Silver miners suffered a tough day, taking a similar plunge around 10 a.m. Coeur d'Alene Mines (CDE) fell $1.88 to $28.34. Hecla Mining (HL) fell 0.32 cents to $5.06. First Majestic Silver (AG) also dropped $1.34 to $20.43.
(Bernanke's) statement that employment is recovering at a better-than-expected rate implies that if quantitative easing is coming, it won't be for a while, said Steve Scacalossi, director of global precious metals at TD Securities, according to Reuters.