Selling spiraled out of manage as money managers competed to liquidate positions in COMEX futures, which skilled their biggest single-day dollar loss since 1980. Volume looked like a report.
The price of gold bullion is now more than $150 below Tuesday's in history high of $1, 911. 46 an ounce, downed by intense speculation about if the Fed will announce new plans to ease monetary policy at a conference late this week.
Analysts said it was time for gold investors to consider money off the table after the rally extended too far, too quick in recent weeks. Bullion rose as much as $400 since July.
"You possess a commodity that retail investors, hedge funds and everybody were long, and the technical indicators showed it had been overbought. It was just a matter of time before the market begins cracking, " said Mihir Dange, COMEX gold options floor trader for Arbitrage LLC.
Place gold was down 4. 1% to $1, 754. 59 an ounce through 3: 37 p. m. EDT (1937 GMT), off its session low associated with $1, 749. 39.
Before gold began recoiling Tuesday from above $1, nine hundred, it had risen nearly 9% over six sessions.
US gold futures with regard to December delivery settled down $104 at $1, 757. 30 an ounce. Reuters data showed that's the biggest price drop of the continuous, front-month contract since Jan. 22, 1980, whenever it tumbled almost $150. On a percentage basis, it was the steepest drop since December 2008, during the financial crisis.
COMEX futures volume topped 430, 000 plenty, on pace to surpass a record from Aug. 9, preliminary Reuters information showed.
Silver dropped 5. 9% to $39. 34 an ounce.
Gold came pressurized after steadying overnight, after a report showing new orders for US long lasting goods orders rose 4% in July, more than expected and offering hope the ailing economy could dodge another recession.
Analysts warned of a sharp correction from this month's rally had been possible, especially if Friday's central bank meeting at Jackson Hole, Wyoming does not create a Fed announcement of a third round of government bond buying, or quantitative reducing, also known as QE3.
"The correction really should be taking place right now, because of all the (bets) on the table, " said Ashok Shah, main investment officer at London & Capital.
"But the journey is not complete until Jackson Hole is performed, " Shah said. The Fed conference starts on Thursday.