Gold News: Gold now at six-year low
Gold News
After the price of Gold hit a temporary rise following the attacks in Paris, it fell back down again this week, now hitting $1062 an ounce, it’s lowest price in six years. While it was obvious that the Paris attacks would have only a short-term effect on gold many analysts didn’t expect its price would fall back down again so soon.
The last time the price of god was this low, it was in 2009 during the recession. At that time stocks were still two months away from bottoming out. However, as the economy continued to struggle, gold, like with a lot of other commodities became a safe haven for investors . Since the shiny metal is measured in US dollars, and the U.S. economy has only gotten stronger, the price has tumbled consistently, falling for 15 consecutive quarters. This past month has had a particularly hard slide, as gold has gone down $50.
The bad news doesn’t stop for gold investors, or for at least those who are still investing it ( Gold investors are divesting from the metal at a rapid rate). Many analysts, such as those at Goldman Sachs don’t believe it has bottomed out. This is because the U.S. Federal Reserve is expected to increase the interest rate in December. Many analysts have been anticipating a rate hike for the better part of a year, which has only caused the metal to depreciate even more. With the interest rate being a near guarantee to rise, gold has began to lose its value as a safe haven, which is why it barely went up following the Paris attacks.
So while the past year has been a difficult year for gold investors, a lot of it has been a result from good things happening in the world. The euro zone’s deal on Greece has reduced the chance of a messy default, and of the break-up of the single currency. The nuclear deal with Iran reduces the risk of war , which tends to raise gold. Once when the rate hike inevitably happens, gold is expected to bottom out at somewhere around $1000. After the rate hike it will become wise to invest in gold whenever something bad happens in the world.
