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31 Dec 2013
Gold heading for its biggest drop in more than 30 years
FXstreet.com (London) - Gold is heading for its biggest annual decline in 30 years as a stabilising global economy cuts its attractiveness as a haven for investors.
Spot gold has fallen by 28 percent to USD1,202.20/oz, rebounding slightly from yesterday’s close of USD1,196.70/oz.
Gold hit a yearly high of 1,684.70/oz on 18 January. It received some support from Fed tapering uncertainty and the effects of the US congressional debt ceiling stand-off, lifting prices from a then 2013 low of USD1,235.30 on 28 June to USD1,396.50 on30 August, before a bearish run that remains in place.
Investors have sold out of their physical gold holdings as well as commodity-backed echachnage-traded-products as global equity markets surged while the outlook for the US economy recovered sufficiently for the Federal Reserve to move to taper its stimulus measures. On 18 December, the Fed announced that it would be cutting its monthly asset purchase programme by USD10bn to USD75bn a month. It is likely that the central bank will move to taper in further USD10bn increments, winding up the stimulus programme by December 2014.
Silver has seen a similar decline in fortunes. It hit USD31.89/oz on January 18 and has declined to USD19.42/oz – down more than 35 percent on the year.
Spot gold has fallen by 28 percent to USD1,202.20/oz, rebounding slightly from yesterday’s close of USD1,196.70/oz.
Gold hit a yearly high of 1,684.70/oz on 18 January. It received some support from Fed tapering uncertainty and the effects of the US congressional debt ceiling stand-off, lifting prices from a then 2013 low of USD1,235.30 on 28 June to USD1,396.50 on30 August, before a bearish run that remains in place.
Investors have sold out of their physical gold holdings as well as commodity-backed echachnage-traded-products as global equity markets surged while the outlook for the US economy recovered sufficiently for the Federal Reserve to move to taper its stimulus measures. On 18 December, the Fed announced that it would be cutting its monthly asset purchase programme by USD10bn to USD75bn a month. It is likely that the central bank will move to taper in further USD10bn increments, winding up the stimulus programme by December 2014.
Silver has seen a similar decline in fortunes. It hit USD31.89/oz on January 18 and has declined to USD19.42/oz – down more than 35 percent on the year.