Gold Stages Biggest Gain Ever in Bid For Safety
Gold staged its biggest one-day move ever Wednesday, with investors flocking to the metal amid a tidal wave of stock market uncertainty.
The price of gold skyrocketed more than $80 an ounce, or 10.74 percent, easily besting the previous largest dollar move of $63 on Jan. 29, 1980, and past the largest percentage gain of 10.24 on March 19, 1980.
With stock indexes tumbling as much as 4 percent during the day, traders took haven in gold as a hedge against the Wall Street fallout.
In addition to the plunging stock market, investors Primary Fund RFIXX saw its net asset value of shares fall below $1--"breaking the buck," in market parlance--and created worry that money markets were going to be the next area to feel the tremors of the credit crunch.
"I don't know that we've ever seen a move to the upside on this magnitude in gold history," Jonathan Kleisner, of Rex Capital Group, said on CNBC. "You could certainly draw a straight line from this market markets issue to the monetized, tangible safety of that gold metal."
Kleisner said gold has always been the "safe haven of last resort" for investors stung by stocks.
"There's just this uncertainty about what's next, how the credit facilities are going to recoup, really giving a question mark to where these currencies are going to flow into," he said. "Again, it drives investments to the safe haven of gold."
As the market climate progresses, Kleisner predicted more investors would move to metals including silver, which also spiked Wednesday.