5 thoughts on “Why did the price of gold plummet?”

  1. Why did the price of gold plummet? There are some reasons for this
    first, the gold price rose from US $252 / oz in August 1999 and US $681 / oz in October 2008 to US $1921 / oz in September 2011, which is a great increase. From September 2011 to now, it can be said that it is an adjustment period. After a sharp fall in mid April, it fell more than 20% from its peak. Technical analysts believe that it has entered a bear market. Whether it is an adjustment or a bear market depends on whether the price will continue to fall or rise in the future. It is also an experiment of technical analysis and fundamental analysis. If there are more investors who believe in technical analysis, most of the prices will continue to fluctuate and fall; If there are more investors who believe in fundamental analysis, most of the prices will fluctuate and rebound
    Second, as mentioned above, the loose monetary policies of various countries (especially those of the United States, because the international gold price is priced in US dollars) make people buy traditional gold to avoid risks and cope with rising prices, which is conducive to the rise of gold prices. However, in recent months, the economic figures of the United States have been relatively good, which makes people expect that the monetary easing policy will be weakened, so they think that it is unfavorable to the gold price, and sell gold in advance to short gold in the futures market. Therefore, it is not the "loose monetary policy is bad for gold" as some commentators say, but the expected tightening of monetary policy is bad for gold
    Third, after the news that Cyprus may sell gold came out, gold bearers took the opportunity to short gold, causing its price to fall sharply in two trading days
    recently, it was also reported that the Swiss people's party proposed a proposal entitled "saving our Swiss gold", requiring the Swiss National Bank to withdraw the gold reserves deposited overseas and deposit them in the country for a long time. At the same time, the people's party will also launch a referendum to "prohibit the central bank from selling gold reserves and force the central bank to increase the proportion of gold assets to 20% of the total reserves by law". The report also said that the Swiss Federal prime minister's office has confirmed that more than 100000 legal signatures have been collected in this activity. According to Swiss law, a referendum must be held
    according to statistics at the end of February this year, the Swiss central bank has about 1050 tons of gold reserves, accounting for about 10% of its total reserves. Therefore, if the bill is passed into law by referendum, Switzerland must increase the proportion of gold assets to 20% of the total reserves, which means that the Swiss central bank needs to purchase about 1000 tons of gold reserves. At current gold prices, this is about $50 billion. Will this encourage bullish gold buyers to buy gold in large quantities, causing its price to soar
    during the financial crisis in 2008, the price of gold fell sharply from about 950 US dollars per ounce to 681 US dollars per ounce. In proportion, the decline exceeded the sharp drop in mid April. However, from 2009 to 2011, the price increased by 2.82 times. 2.82 times of $1321 / oz is $3725 / oz.

  2. The U.S. economy is gradually recovering. In 2012, the top of the gold price was confirmed. Many people bought gold for arbitrage, and the gold should also fall

  3. Although the further escalation of the situation in Ukraine will support the gold price, it is expected that the economy of the United States and China will accelerate, so the gold price will fall. But these accelerations may take weeks to remove the uncertainty. More importantly, a sustained slowdown in US growth will prompt us to reconsider our expectations of low gold prices in the next two years. In addition to the acceleration of the US economy, the weakening of China's gold imports will also put pressure on gold prices in the coming months. "
    today's gold price is currently around us $1325.60/oz, which is about 20% lower than Goldman Sachs' expectation of US $1050 / oz. (source: State Street investment)

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