Gold prices tumble to 5-year lows , Australian dollar suffers

Gold prices tumbled to five-year lows after the precious metal ran into a wave of selling in Asia that drove it down 3.9% to $1,089.80 an ounce, having already suffered its worst weekly performance since March last week.

Gold dropped abruptly as much as 5.5% in morning trade to a low of $1,072.35 from Friday’s close of $1,134.47.

The Australian dollar suffered the most as a result of the fall in gold prices since it is a commodity-linked currency. Australia produces gold. AUD/USD was down 2% at 0.7359 in the session and touched as low as $0.7326.

The U.S dollar held broad gains in Asia on Monday as investors looked ahead to higher interest rates from the Federal Reserve, while gold slumped to five-year lows as a lack of global inflation left little to hedge against.

Shares in Australian gold miners were hit hard. Evolution Mining tumbled 15%, while Northern Star Resources lost 9%, and Newcrest Mining , Australia’s biggest independent listed producer, lost 8%. The S&P/ASX 200 index dipped 0.1% or 8.2 points to 5,631.9 by 03:31 GMT. The benchmark hit a three-week peak of 5,591.2 last Thursday.

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