Yamana (NYSE:AUY), Gammon (NYSE:GRS), NovaGold (AMEX:NG) Slammed on China Interest Rates

Speculation on the possibility of China raising their interest rates had gold traders and speculators jittery today, and spot gold prices plunged by over $40 an ounce, bringing with them gold miners like Yamana (NYSE:AUY), Gammon Gold Inc. (NYSE:GRS) and NovaGold Resources.

While gold investors are probably happy about the price of gold plummeting like it has, as they've been waiting for another entry point to invest in gold, traders and speculators are fleeing their long positions in gold in order to cover margin calls in other investment sectors.

This has all come about from the revelation that the consumer price index of China came in higher than expected, driving the rumors the middle kingdom may be ready to increase their interest rates to combat the inflationary forces.

The volatility of the price of gold is driven by traders and not investors, and that's why it's considered a good thing by investors as they see it as a potential great opportunity, although most will surely wait to see if there is in fact a much larger correction coming.

Yamana was trading at $11.68, losing $0.37, or 3.07 percent at 1:15 PM EST. Gammon Gold was at $6.55, dropping $6.55, or 3.65 percent. NovaGold was trading at $14.47, falling $0.58, or 3.85 percent.