Gold stumbles; experts believe it to decline
The gold price on Monday tumbled to its lowest recorded in the last five years globally. However, in India, a two-year low price was witnessed.
Unfortunately, the investors have expected a further decline in the gold’s price over a period of 12 months. As quoted by a leading tabloid, G Chokkalingam, founder of Equinomics Research & Advisory, said, “We have been profoundly negative on gold for the last one year. China’s gold reserves were substantially below expectations, and the upside of stock markets has taken the attention of investors there away from gold to equities.”
The descending cost of gold has lead to a fall in the holdings in SPDR Gold Trust, a top gold fund. It recorded the lowest cost since 2008. This significant phenomenon occurred due to the rising dollar prices. Gold is calculated regarding dollar. So, when the monetary value surges, the gold’s worth decreases accordingly.
Besides, a surge in the US interest rates has further led to a decline in the gold’s price. It has also been affected by the dipping demands in China and India. Though China revealed a 57 per cent increase in its gold reserves on Friday, it was way less than what the analysts had predicted. Some are also blaming the Greece crisis for the decrease.
Though gold is considered as a safe investment to be deployed during the crisis, with declining prices, experts are not considering it as a haven.
According to the experts, if the gold rate falls below $1,050 (an ounce), it will impact as the increase in gold price.
Phillip Futures analyst Howie Lee said to a leading tabloid, “A repeat of history does not look to be on the cards, but we still expect substantial downward pressure on gold in the future. It looks to be a matter of time before gold breaks again.”