By Max Clarke
The price of gold continues to slide as investors increasingly look to sell in a bid to stem losses from poorly performing portfolios.
Mean gold prices reached a low of $1,816 per troy ounce this morning- 7% below the $1920 peak reached in late august.
Previously, in the face of widespread market uncertainty undermined by prolonged inaction over the US debt crisis, coupled with the threat of collapse in Italy and Spain, investors had turned to gold as a safe investment. Prices correspondingly hit a series of record highs throughout 2011, peaking at $1,920.
The recent losses mark not so much recovery, but perhaps an almost panicked ‘fire sale’ of privately held reserves.
“This, in my eyes, has very little to do with gold as an asset and I attribute the falls in gold to investors being forced to sell their positions long the yellow metal to fund losing positions in equities,” explains Jeremy Cook, Chief Economist at World First currency brokers.
“With volatility increasing in the past few weeks marker participants have hiked the amount of deposit needed to trade to protect from default; some people have had to sell profitable gold positions to make these payments.”
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