Brighton precious metal dealers Michael Bloomstein noted that on Monday last week the stock price was trading at £194.83 per oz troy, but this had risen to 204.07 by Thursday. This followed a decline the previous week to £195.56 per oz troy – a value not seen since January 2002.
Gold usually strengthens as stocks fall, and experts would not expect such volatility under these circumstances. Analysts attribute the initial fall to sales of gold by investors sensing the end of the earlier bull market and those needing to offset losses or margin calls from the declining equity markets. Heavy buying in Japan, where recession has been ahead of the rest of the world, would seem to contradict this view, however.
Renewed buying interest in physical metal in India may have helped the price to recover, but the severe weather conditions in India do not bode well for demand in this sector.
Gold proves more volatile
THE price of gold has been extremely volatile, with a five per cent swing in only four days.
