Global gold prices have seen a sharp decline. According to the latest report by the World Gold Council (WGC), gold prices have fallen by 12 percent in March, which is the biggest monthly decline since June 2013. By the end of March, the price of gold has fallen to $ 4,608 per ounce.
Why Has There Been Such A Big Decline In Gold Prices?
According To The Report, There Are Several Main Reasons For This Decline:
Global ETF withdrawals: About $ 12 billion (84 tons) was withdrawn from the global gold ETF during the month of March. The highest sale was seen in North America.
Liquidation Of Positions By Investors:
Investors have rapidly sold their old positions in the ‘COMEX’ market. Especially on March 16, when gold fell below its 50/55-day moving average, the selling intensified.
Liquidity Needs:
To offset the losses in the stock market and meet the need for liquidity, many investors raised capital by selling gold.
Central Bank Intervention: News of the Turkish Central Bank using about 50 tons of gold as collateral also put pressure on the market.
Increased Trend In Asian Countries
While gold was sold in Western countries, there was an increase in gold purchases in Asian countries. According to the report, $ 1.9 billion was invested in Asia, which shows that investors here have shown interest in gold at low prices.
What Do Experts Say About The Future?
The World Gold Council believes that although there was a decline in March, the trend of ETFs is becoming positive again in early April. Despite the volatility in the dollar price, investors are still viewing gold as a safe investment for the medium-term. The important thing is that despite such a huge decline, gold still remains in a profitable position on an annual basis.
