Gold prices have declined in all four sessions in New York which is the first in itself. Thus, set for its biggest annual loss in three decades, gold prices according to some market observers are not going to improve further as the national economy is improving and there would be less demand for a protection of wealth.
The latest update is that bullion slid to $1,186 an ounce on Dec. 19 which is quite close to this year’s lo,w which it reached in June. Though later on it reached to $1,218.90 on Dec. 27 and improved slightly, there is no improvement in the status as the yellow metal has lost its sheen in the investment market and lost in all four sessions in New York.
Reports claim that global equities traded near the highest since 2007 amidst the news that the U.S. data on housing and manufacturing may show better growth this week. The gold prices are falling, as there is an improvement in the economy, and there is little to no inflation which causes fear and prompts investors to buy gold.
Gold Futures for February
According to the reports coming from the various sources, gold futures for February delivery fell 0.8 percent and finally settled at $1,203.80 at 1:41 p.m. on the Comex in New York. Thus, here too there was not much respite for the yellow metal as it traded 49 percent below the average for the past 100 days for this time of day.
There has been a remarkable fall in the gold prices and so far it has tumbled 28 percent this year, which is the worst annual plunge since 1981. There are various reasons that are being cited for the fall; for instance, one reason is suggested that it can be safely presumed that investors lost faith in the metal.
This according to the market observers is due to the fact that gold loses sheen when there is not much risk in the market and there is less inflation. The U.S. economy and the global economy at large seem to be moving up, which is sending the right signals. Inflation is low in the U.S. and employment has gone up, such situations prompt investors to invest elsewhere than gold.
However, another reason that should not be forgotten is that India which is the largest consumer of gold, imported less gold this year.
To contact the reporter of this story: Jonathan Millet at email@example.com