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Gold plungesJohn CavillSWAMPED by selling out of the devalued currency economies of Asia, and stripped of any lingering safe haven status by Swiss proposals to loosen ties with bullion, the gold price plunged to its lowest price level in a decade during the storms ripping through international equity markets. Gold had been drifting back from a silver-led rally to $339 an ounce at the beginning of October when it was hit by short selling by commodity funds after Switzerland proposed the sale of 54% of its gold reserves by 2000 -- $12-billion at current prices, a figure cut later to $10-billion. Profit taking by short sellers after the initial $16 drop to $308 on the Swiss move helped gold back to $316.60 on Thursday. But bullion was back to $311 as the week ended amid renewed concern. Switzerland's move was worse than the blow suffered when Australia disclosed the sale of 167 tons. "Switzerland has been the best friend the gold market had. That is why it is such bad news," said Andy Smith, analyst at UBS. It is a trend that could continue. "The more persistent the failure of gold to perform, the more of a black mark it gets among the managers who increasingly run central banks," an analyst said.
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