Gold plunges to lowest in almost 3 years

Staff Writer
Columbus CEO

The price of gold is plunging to the lowest level in almost three years, as traders anticipate lower inflation risk as the Federal Reserve dials back its economic stimulus program.

Gold for August delivery dropped $45.30, or 3.6 percent, to settle at $1,229.80 an ounce Wednesday, the lowest since August 2010. Silver also plunged, giving up 93.9 cents, or 4.8 percent, to $18.587 an ounce.

Gold tends to do well when interest rates are low, the dollar is weak and when traders fear inflation.

Those conditions were in place when the Fed's bond-buying program was in full swing, but news last week that the program could be curtailed later this year and ended outright next year caused gold prices to fall sharply.

Energy were mixed and crop prices were lower.