The price of gold plunged by 5.6% on Wednesday to close at $1,757.30 an ounce in New York, a drop of $104 on Tuesday's finish.
During a volatile week for the precious metal, its price has fallen since topping $1,900 an ounce during trading overnight in Asia on Tuesday.
Analysts put the falls down to profit-taking and hope of new measures in the US to try to bolster its recovery.
Gold is perceived as a safe investment in times of uncertainty.
Its price rose steadily this month during a tumultuous period on the markets caused by fears about the global recovery and euro debt crisis.
Some predict that Federal Reserve chief Ben Bernanke will signal a new round of quantitative easing to try to kick start the US' sluggish economy when he speaks at a gathering of central bankers on Friday.
But that explanation, cited as a potential reason for the sharp fall on Wednesday, was also given on Tuesday when gold rose to a record price of $1,913 an ounce.
According to this line of thinking, investors assume that quantitative easing, in which the central bank injects new money into the economy, could depress the value of the dollar, making gold a more attractive investment.
European stock markets also rose, with London's FTSE ending 1.5% higher, the Cac 40 in Paris up 1.8% and Frankfurt's Dax closing up 2.7%.
Stronger-than-expected US durable goods data, a leading economic indicator, could also have helped shares. The latest figures showed that companies ordered more big ticket items such as cars and planes in July.
( source : http://www.bbc.co.uk/news/business-14656210)
No comments:
Post a Comment