Gold futures briefly fell through the $1,600 level on Wednesday after the Fed announced that they would extend its Operation Twist program from June through the end of 2012, swapping $267 billion of shorter-maturity debt for longer-dated debt, though no QE3. Gold futures retreated 0.46%.
On Thursday, gold, stocks, commodities and the Euro/Dollar all reacted badly to the weak economic data from China, Europe and the U.S. Gold futures plunged 3.1% to $1,565.5, the S&P fell 2.2%, the Stoxx dropped 0.37%, CRB Commodities Index fell 2.1%, while the Euro/Dollar sank 1.3%. VIX surged 16.5% on Thursday to 20.08, back to the level of 9 May. Gold futures are now under-water for the year, after falling 3.8% so far this week, the worst weekly performance since the week ending 16 December.