The price of gold has declined sharply, dipping to a five year low on 24 July.
Prices had been falling for six weeks in a row, the longest period since 2004.
Analysts link the fall to the fact that the US economy is becoming healthier and this could prompt the country’s Federal Reserve to raise interest rates. Those who chart the course of the US dollar say that when it gains strength against other currencies, the price of gold and other commodities usually drop.
Another factor could well be the third bail-out for Greece which indicates that the beleaguered nation will remain in the eurozone. As a result, investors are willing to try to gain better returns through riskier assets, including government bonds from Portugal, Spain and Italy.
China is the world’s largest consumer of commodities, but the slowdown in its economy has reduced demand. This has also helped to push down the gold price.
After rising almost steadily since 2004 when the price was just $422 per ounce, the gold price peaked at $1,900 in September 2011. Investors keen for a safe haven in the Great Recession kept pushing the value up.
But by 31 July, the price was down to $1,082, just about the same rate last seen in November 2009.
