Gold market prices have dropped slightly again today due to a sell off by investors eyeing the debt crisis in Europe still. As the stock market prices dropped due to European worries, Gold soon followed the downward direction of the stock market as commodity prices also became weaker. December Gold futures were down $15+ per Ounce to under $1785 with the Gold Spot price market holding at around the $1783 an ounce level. In the short term the fact that Italian government bond yields increased above 7% (causing there to be a strong possibility of Italy not being able to repay its debts) has induced traders to sell Gold and Silver commodities. But in the long run the European uncertainty that continues through today Wednesday 9th November 2011 still remains Bullish for Gold and Silver.

Gold is a precious metal that has held the world in thrall since its discovery. Known by many names with one of the most descriptive being “tears of the sun” it has enticed and allured man’s imagination, even as it caused some men to covet this metal more than life itself. Gold has always been an expensive metal and the fact that it is usually used to set precious stones in jewellery pieces has made it even more special. The prices of Gold have been greatly influenced by the fact that its supply has always been far lesser than its demand. In recent times with the world being rocked by one economic crisis after another, many governments and personal investors have chosen to invest their money in gold. This very fact is more than enough to vouch for the importance and status that this metal enjoys the world over.

Gold prices have skyrocketed in recent months and Gold had been one of the only commodities to rise in value during economic uncertainty. One reason for the rise in the price of this precious metal been the unprecedented demand from China and India, some of the world’s largest consumers of Gold. In the most recent few weeks however, the prices of gold have dropped considerably causing many people to wonder if the recent rally in Gold prices can continue or if it has stalled. The truth however is not so simple. The reason for the gradual and steady drop in gold prices could be attributed to the low lending rates of interest against gold that exist in the world commodities markets. Huge corporations and some nations have begun selling their gold stocks to cover losses in other investment vehicles (such as stocks and shares) and this has put a great deal of pressure on the yellow metal. With many investors ‘profit taking’ by selling their Gold positions on the global market, the rates of Gold have drastically fallen. While the prices have not fallen like they did in 2008, it is definitely a cause for concern and worry amongst economists who predicted earlier this year that Gold would continue to rise for a longer period.

Metals Science
Commodities, gold, investment, precious metal, silver