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The Gold Slump

The value of gold has fallen for “the first time in four sessions in New York”, according to Bloomberg. The Bullion decreased from $1,186 an ounce on December nineteenth, but increased to $1,218.90 on December twenty-seventh. The head dealer at Integrated Brokerage Services, Frank McGhee, explained, “We’re seeing improving economies with little or no inflation. The fear has been stripped out of the market, and absent inflation, I think we’ll see gold continue to grind lower into next year.”

 

The futures for February trading were forty-six percent below the average. Gold hasn’t taken such a drastic plunge since 1981, falling twenty-eight percent. The “improving economy” has resulted in the Federal Reserve to cut back its eighty-five billion in bond purchases per month.  Peter Fertig, the owner of Quantitative Commodity Research Ltd., commented, “The market is fearing the impact of tapering. You have firmer equity markets. There’s currently no crisis and nothing that would induce investors to rush into gold.”

 



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The Fed is coerced into reducing its bond purchases in ten billion dollar increments in December 2014. The value of silver has also taken a fall. Silver futures for March delivery decreased 1.7 percent to $19.705 an ounce. The metal’s worth fell thirty four percent this year for “the biggest annual slump” (similar to gold) since 1981.

 

Image Credit: Bloomberg

 

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Jaan Posted by on December 30, 2013. Filed under Business News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.