Gold Heads for Biggest Weekly Drop Since July on Equity Slide (Pham-Duy Nguyen)

  Gold in New York headed for the biggest weekly decline since July as investors sold the metal to cover losses in equity markets. Silver fell more than 5 percent.

  March 2 (Bloomberg) -- Gold in New York headed for the biggest weekly decline since July as investors sold the metal to cover losses in equity markets. Silver fell more than 5 percent.

  Gold futures in Japan dropped the maximum allowed by the Tokyo Commodity Exchange as the Nikkei 225 Stock Average had its biggest weekly decline since June. In New York, the metal has tumbled 6.2 percent this week following the sell-off in Chinese shares on Feb. 27 that triggered a loss of more than $1.5 trillion in global equity values.

  ``People are getting hurt in their stock positions, and the only place where they have profits in the past six months is gold, and they're going to take it,'' said Dennis Gartman, trader, economist and editor of Suffolk, Virginia-based Gartman Letter. He sold half of his gold holdings yesterday.

  Gold futures for April delivery fell $21.10, or 3.2 percent, to $644 an ounce at 12:50 p.m. on the Comex division of the New York Mercantile Exchange. Before today, gold was up 18 percent in the past year.

  Silver for May delivery plunged 74 cents, or 5.4 percent, to $12.91 an ounce. Prices are down 12 percent this week, the most since May. Before today, the metal had climbed 41 percent in the past 12 months.

  A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.

  Concern over a global economic slowdown helped sparked a decline in stocks, which headed for the worst week since April 2005. Before today, the Standard & Poor 500 Index and the Dow Jones Industrial Average had fallen 3.3 percent this week, while the Nasdaq Composite Index, which gets 40 percent of its value from computer shares, dropped 4.4 percent.

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