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Gold Down on Account Freeze

Written By Brian Hicks

Posted July 11, 2012

PFGBest announced Monday that their accounts were under freeze, striking up an investor-led sell-off and setting off a 1.3 percent drop in gold on Tuesday. $220 million in customer funds were missing from PFGBest’s brokerage accounts.

Gold had rallied earlier Tuesday after the EU agreed to set aside $123 billion in aid for Spain, but this sell-off wiped out that increase.

Jefferies Group, a US investment bank, announced it was liquidating its PFGBest trading positions.

Spot gold dropped to $1,565.90 from $1,600.90, a fall of 1.3 percent. U.S. COMEX gold futures for August slid down to $1,579.80 per ounce, a decrease of $9.30.

Reuters reports:

“Gold was weighed down by liquidation across different sectors as metals, energy and equities are all significantly lower,” said Phillip Streible, senior commodities broker at futures brokerage R.J. O’Brien.

Despite gold’s falling prices, investment interest remains minimal. Exchange-traded gold holdings fell the most in one day since May.