Forexpress | Gold Melting Away

According to Bloomberg reports, the price of Gold had plummeted down to its lowest point since 1999. If we checked on the records, on September 1,1999 the price of Gold had reached its lowest peak during the 90's with a price of $252.85 before showing signs of recovery.

“Gold price reached its record low since 1999.

The fall in gold prices that took place in recent months was the most prolonged in the XXI century, Bloomberg reports. The prices for gold declined for the fourth consecutive month reaching its lowest level since 1999 though in early 2012 the troy ounce of gold edged 0.7 pct. During the Asian trades of May 29 gold fell 0.6 pct to $1573 per ounce. In general, during the whole month of May the price was down 5.5 pct. This fall in prices on gold results mainly from the strengthening of the dollar, while the fundamental factors point at the growth of prices. In April the most of world’s central banks including those of Turkey, Ukraine, Mexico and Kazakhstan expanded their gold reserves. Moreover, the consumption of gold in China increases. According to various estimates, in 2011 the total volume of gold consumption varied from 761 to 769 tons. This year this figure will increase making China the leader among world’s biggest gold consumer and leaving behind the former leader – India that has been occupying this position in recent years. Gold is used by investors on world markets as the safe place for investing money in case of emergency. At the same time the growth of dollar prevents the growth of prices for gold. For the last 10 years the price on this precious metal increased more than 5 times reaching its record in 2011 when the price for gold was $1889 per ounce.”

Gold being the safest instrument to lean on, when an adversity is at hand, is also starting fail.

Its high value and being an independent resource, since it is not directly connected to organizations and countries thus making it almost invulnerable to a sudden change in the economic enviroments, makes it the apple of the eye of some traders.

Also it may served as a protection against the US dollar but it seems that it won't be regaining its strength anytime soon.