Gold Market Crashes on Low Demand, Stronger Dollar
Posted by James Randolph on December 02, 2013
Stores promoting Black Friday deals weren’t the only businesses to suffer at the hands of Cyber Monday, as the Monday after Thanksgiving was able to lure shoppers away from cold weather and long lines. Certified gold investments suffered, too, as consumers took advantage of deep Internet discounts to stay focused on holiday shopping rather than investment options. As a result of the lackluster demand the gold spot price fell more than $25 today to finish at $1224.90 per ounce.
Even though mom-and-pop investors have generated a consistent demand for gold over the last 12 years the derivatives side of the gold market has been savagely manipulated by large banks and institutional investors. Mass sell-offs of derivates, especially ETFs, have forced spot gold down and are responsible for at least three steep drops in the gold price this year.
The dollar index has started to climb after falling from above 82 to the 79 range recently, putting more downward pressure on the yellow metal. Projections are for gold to trade in the $1200-$1250 level through the end of the 2013, and many analysts have stated publicly that gold could resume its climb in early 2014 if incoming Fed chair Janet Yellen decides to pull in the reins on quantitative easing and low interest rates.
Gold climbed from $252 in 2001 to an all-time high of $1900 in 2011 before a new round of government handouts boosted traditional markets and led some investors to sell their holdings of physical gold. For historical data on the gold market or to receive regular gold market updates scroll down for complimentary starter kits as well as free access to our award-winning online tutorial.