All That Glitters Is Not Gold Anymore


The old saying that ‘All that glitters, is not gold’ is becoming a reality in the global economy. Gold rates nosedived again Friday, March 13 after losing out on the gains made during the early morning trading. This is the tenth consecutive day of trading when gold has recorded huge losses. It is also its longest loss making run in the past four decades. At the same time, the U.S. dollar has been appreciating.

Friday, spot gold prices climbed at the beginning of trading. However, it went spiralling down by 0.1 percent and closed at $1,152.26 per ounce of gold by the end of day. This is equivalent to the stretch of losses gold stocks recorded in the month of August 1973. Gold prices back then recorded a fall for ten consecutive days. The price of the U.S. gold for the month of April 2015 remained untouched and it was valued at $1,151.30 per ounce.

goldGold stock prices have been under immense pressure over the past few weeks. It is moving towards recording a loss making week in six out of the last seven weeks of trading. The price of gold has taken a dent of 1.3 percent so far. It recorded its lowest price point in over three months Wednesday closing at $1,147.10 per ounce.

Friday, March 13, the U.S. dollar recorded a rebound in its value compared to other currencies in the world. This was after the USD registered its monumental single day fall within one month. It is being said that gold prices are getting hit after the United States jobs report that came out the previous week, turned out to be a lot better than many expected. The conjecture that after this the U.S. Federal Reserve could increase the rate of interest early added fuel to the fire. The consequent focal point would be the Federal government’s committee meetings scheduled March 17 and 18 for deliberations on setting of policies.

Ole Hansen, Head of Strategy, Saxo Bank, reportedly commented that gold is presently valued a little above $1,150 which is a critical price band. However, there is a lot of risk regarding the gold prices sliding further down in case the value of the USD continues to appreciate before the meeting of the Federal committee. He also pointed out that this is of extreme importance as the value of Euro and the USD are so close to being equal. This proves that the saying, ‘All that glitters, is not gold’ could become a fact after all.

goldThe USD registered its uppermost value in more than a decade Friday, March 13. It is widely speculated that the value of the USD and Euro would become equal because of the difference in the interest rates in the US and European markets. As the value of the USD increases, it would bear down heavily on metal stocks, especially gold.

Various other metal stocks have recorded losses. Silver stocks fell for the second consecutive week and it closed at $15.49 per ounce down by 0.6 percent Friday. Palladium saw its lowest price point in a week since the month of January. It closed at $789.30 Friday. Platinum recorded an appreciation of 0.3 percent and closed at $1,112.23 per ounce. The metal had recorded its lowest price point since the year 2009 and had closed at $1,108.50 Thursday. For now, the saying ‘All that glitters, is not gold’ has literally become a reality in the World economy.

By Ankur Sinha

Wallstreet Observer
The Bullion Desk
The Times Of India

Photos by:
Bullion Vault – License
Trey Ratcliff – License
Thomas Hawk – License

Your Thoughts?