Gold prices slump 3% on stock bounce

Gold recoiled after tapping a new record on Thursday, heading for its largest daily loss in over a year as equities rebound and higher trading margins fanned profit-taking from the biggest rally since 2008. Prices slumped nearly three percent and fell over $80 from their overnight peak in one of the biggest daily swings ever. As Wall Street stocks extended an early rally to nearly five percent by 3 p.m. EDT, gold plunged to the day's lows. The spot price for bullion fell three percent to $1,740 an ounce, reversing Wednesday's sharp gains and on track for the biggest daily loss since July 2010. Gold futures fell 1.8 per cent to settle at $1,749.90 an ounce. Silver held up better than bullion, falling only 1.5 per cent to $38.70 an ounce as it drew some benefit from equity gains that suggested a less-grim economic outlook.