While many investors and financial analysis predicted that Gold would go past the $2,000 mark a few weeks ago, what happened is the complete opposite. Gold prices have been going down slowly for the past few days, and today the price is at $1736.34 per ounce, a record low for this past couple days.
The recent price fluctuations are reported to be attributed to yesterday’s announcement by the Federal Open Market Committee of “Operation Twist.” The Federal Reserve plans to flatten the yield curve of the U.S. Treasuries by selling short-term bonds to buy long-term bonds. This action has seemingly disappointed the equities markets and stocks have been in retreat creating temporary liquidity needs.
Despite the recent volatility in the market, Gold has maintained its appeal as a “store-of-value” or “safe-haven” asset for many investors. This year alone, central banks are projected to buy more Gold than any other time since the collapse of the Bretton Woods system over 40 years ago. Director of Precious Metals Sales at Barclays Capital, Jonathan Spall, told Financial Times in an interview, “We’re going back to a time when Gold is seen very much as money.”
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