gold price is tanking, page-14

I don't understand the drop in Gold sp. This announcement came out on Reuters just before the drop...

Gold nudged up on Monday afterstocks were battered by a U.S. task force rejecting the turnaround plans of big automakers, underscoring scepticism about an economic recovery.

The Obama administration autos task force on Monday
rejected overhaul plans of General Motors Corp (GM.N) and
Chrysler LLC and warned both could be put through bankruptcy to
slash debts. [ID:nLU152601] [ID:nN29520526]

Tokyo shares steepened their decline and were down nearly 4
percent after the news, against the morning's drop of 1.8
percent. [.T]

"How U.S. stocks and bonds will react to the auto news will
be key for the gold market, but judging from Nikkei's slide it looks to be a positive for gold," said a dealer at a Japanese trading firm.

Gold was at $925.00 per ounce by 0530 GMT, up 0.3
percent from New York's notional close of $922.10. Gold fell 3
percent last week but has held firmly above $900 thanks to
buying related to gold-backed securities.

At current levels, gold is up about 5 percent on the
quarter but about 10 percent below an all-time high of
$1,030.80 hit a year ago. Bullion has recovered about 5 percent
from a six-week low of $882.90 hit on March 18, but is 8
percent off the 11-month high above $1,000 set in February.

Stabilising stock markets and the dollar's rise over the
past week after the U.S. government announced measures to clean
toxic assets off banks' balance sheets put a cap on gold
prices, undermining the yellow metal's appeal as a safe haven.

Still, uncertainties over the sustainability of a stock
market rally and the dollar's rise, as well as the global
economic outlook, kept investor appetite intact, resulting in
record holdings of gold-backed securities.

"The stock market is stabilising and investors are stopping
their safe-haven buying of gold," said Ronald Leung, director
of Lee Cheong Gold Dealers in Hong Kong. At the same time,
there was nothing to justify selling of gold because it was
unclear how the economy would fare, he said.

It has been six months since the collapse of Lehman
Brothers, which aggravated the financial crisis, and the global
economy and financial system have yet to show a clear sign of a
turnaround, traders said.

"Unless the economy really starts working and stock markets
rally, banks start lending and businesses revive, people will
not jump out of the gold market," Leung said.

Trading was subdued due to the month-end and as some
players turned cautious ahead of U.S. nonfarm payrolls data due
later in the week. There were few expectations of the meeting
later in the week of the G20 group of the world's biggest
economies, traders said.

The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust GLD, said holdings rose 2.45 tonnes to a
record 1,127.44 tonnes on March 29. [GOL/SPDR]

For details on the gold holdings of the ETF listed in New
York and co-listed on other exchanges, click on:
here

The dollar fell nearly 1 percent against the yen but firmed
against the euro after the single currency posted its biggest
one-day fall since early January on Friday. [USD/]

Later on Monday, data on British consumer credit and
mortgage lending for February and euro zone March business
climate sentiment will be