The falling gold price today was hot on the lips of many investors, and many are asking what caused falling gold prices.
first of all, the falling gold price..... was it just reaction to the Boston attacks? Well, no!, however the Boston attacks sure did give the selloff some momentum to a market that was already vulnerable.
Terror or attacks like the Boston attacks do not seem to have a lasting effect on the global markets these days especially after the SEPTEMBER 11 Attacks back in 2001. Believe it or not, these Boston attacks will not have a lasting impact on the markets or smaller companies in general.
The falling gold price has more to do with the weaker info and news events coming out of the US and China and other commodities have sold off across the board.
China consumes more than 40% of the worlds metals, so as a result of the disappointing growth figures coming out of China recently, it has a huge impact on commodities and gold in particular. It seems the average investor has over estimated what they expect from china and its future growth rates which are lackluster at best.
The falling gold price yesterday came at no surprise as Metals and equities have been rallying quite strong lately and a sell off like this was overdue anyway, especially with the negative news headlines recently.
Gold tends to be a safe haven for investors especially in times of uncertainty so you would expect gold prices to strengthen, however there are views that Japan with all their printing off of money is undermining its own currency and has changed the risk assessment around the world, so investors are now unsure if gold is actually as safe as before. Investors are also not sure about inflation and if it is going to be a big problem anymore. So that is another reason for the sell off.
Falling gold price : As you can see on the gold chart we had a very dramatic sell off in gold, but there is no reason to panic as sentiment traders sees this as a major manipulation and would not be surprised to see gold right up higher by the end of 2013.
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