COMMODITIES : Gold, Silver Plunge in Selloff by Japanese

Gold closed sharply lower Monday and silver ended at a five-month low as Japanese investors sold precious metals to cover losses on the Tokyo Stock Exchange.

The key 225-share Nikkei index closed down 1,569.10, or 4.5%, at 33,321.87, the second-biggest fall in its history.

“After being battered for a week, Japanese investors are being pushed to raise cash by selling stagnant assets,” one metals trader said.

At New York’s Commodity Exchange, gold for April delivery fell $6.40 to $411.80 an ounce after a recovering from a six-week low of $409.50.

Taking a lead from gold, Comex silver futures closed at five-month lows. March silver fell 9.2 cents to $5.148 an ounce, penetrating the last contract low of $5.176 set Jan. 3. May silver lost 9.5 cents to $5.23.

At the New York Mercantile Exchange, platinum futures recovered from a plunge to five-month lows, but the market still had large closing losses. The April delivery fell $15.40 to $511.10 an ounce after rallying from a low of $506.00.

Traders on overnight precious metals desks said the selling originated in Japan, hitting gold and platinum in the Far East. The selling cascaded to markets in Europe, London and, later, New York.