You may have noticed that this has been a rough time for gold: Yesterday, gold prices dropped for the tenth day in a row, their longest losing streak since 1996. Gold futures prices are down 7.8 percent on the year, and have fallen by nearly 35 percent since the end of 2012. Goldman Sachs is now predicting that the price of an ounce of gold will fall below $1000 for the first time in more than six years.
What’s causing all this? Gold is a worldwide commodity, so recent global events often have a significant impact on its price, and have been accelerating longer-term trends lately. One theory is that with Greece now looking as if it won’t exit the euro, and the Greek crisis subsiding for the moment, investors have less need for a defensive haven, which gold often is.
Also last week, China released data showing that its gold reserves have risen by about 60 percent since 2009. If the world’s second-biggest economy is no longer looking to buy gold, that’s going to put a damper on global prices.