Gold on track for worst quarter since 1920
The gold spot price hit a 33-month low today after positive US economic data strengthened the case for a tapering of quantitative easing, further eroding demand for safe havens.
The spot price of the precious metal dropped 3.8% to $1,229 per troy ounce this morning, its lowest since September 2010. Silver also tumbled 5.1% to $18.56 an ounce, hitting August 2010 lows.
Prior to today’s falls gold has lost 22% since the start of April, leaving it on course for its worst quarter since at least 1920, according to Bloomberg research.
Gold is plunging as the US economy shows continued signs of improvement, causing a big move up in the value of the US dollar which is inversely correlated to the gold price.
Yesterday, more data prompted the latest flight out of gold, with US durable goods and consumer confidence numbers both surpassing expectations, hastening the price fall.
Fed chairman Ben Bernanke sparked the rout in gold after stating last month the central bank may trim its purchases of Treasuries and mortgage debt, estimated at $85bn per month.
This year’s bear market is also the first after twelve years of annual gains, with gold on course for its worst year in three decades.
Year to date it has fallen 26% including today’s sharp fall.
This article was previously published on Investment Week