What are the top reasons of decreases in the gold price?
After an increasing trend for 10 years, the gold price suddenly has decreased to below $1,400 levels in the middle of April 2013, but then it has covered a little. People have wondered the reasons of this decrease in the gold price. There are many reasons showed by the gold analysts, but there is no unique answer to explain the reason of decreases in the gold price. The top five reasons stated by the analysts are the followings:
1) The gold sale of Bank of Cyprus to decrease its debt. It did not put much pressure on the gold price, but market analysts has stated that it would probably provide some countries to follow the same way to decrease their debts, and thus it caused a decrease in the gold price
2) Profit realization. Note that the gold price has increased for 10 years. Especially, after 2008, depending on the global economic crisis, demand for the gold increased fast leading increases in the gold prices
3) Central Banks’ monetary policies. According to the some analysts, the possibility of that U.S. Central Bank Federal Reserve might decrease its monetary easing soon depending on the economic recovery led the decreases on the gold price. However, some other analysts showed the Bank of Japan’s aggressive monetary easing policy as a reason of decrease in the gold price.
4) Slowing Chinese economy. Depending on the slower economic growth than the expectations in the China would cause a decrease in the global demand of gold, leading the decreases in the gold price
5) Some market reports. Some financial institutions such as Goldman Sachs published reports about the gold price and told that they have waited a downward correction in the gold price. After this kind of some reports, the gold price suddenly has decreased.
These top five reasons mentioned above and other possible reasons has caused a fast decrease in the gold price. After decreasing below $1,400 levels, the gold price has recovered recent a few days, and seen the levels of $1,450. Nobody certainly knows that what the gold price will be. As an investor, do not invest all your money to the gold at one time due to these fast changes in the gold price.