If you’ve been awake at all in the past 2 weeks, you would have heard that the gold price has taken a serious dive. Many investors had speculated that the gold price would smash straight through the $2,000/ounce mark by the end of 2011 but that prediction is looking increasingly unlikely. But most of you will probably be very confused about the gold price altogether – so let’s take a look at this commodity’s price fluctuations since the start of 2011.
Gold Price in January 2011
The year started off with a gold price of $1400 per troy ounce that quickly dropped following huge trouble brewing in the Greek economy. While there was a sharp fall of $200 in the gold price, it was restored within weeks and began a steady rise.
Gold Price in March 2011
March saw the most fear-driven investment decisions since the financial crisis of 2008. Greece had defaulted and further trouble in the Italian and Spanish economies loomed. The one glimmer of hope for commodities was the potential ousting of Muammar Gaddafi who controlled some of the World’s richest oil fields.
Price of Gold beyond March
While the economy looked to be in turmoil, the price of gold really hadn’t reflected this. When an economy flounders, gold prices are expected to rise sharply as people begin to invest in the ‘stable’ and ‘secure’ gold commodity. However this was not the case, the price of gold was rising but no faster than it had been since the end of 2009. That was until gold price speculation went absolutely insane. As fear got gold of investors, prices rocketed to nearly $2000 per troy ounce. However this remarkable increase in the gold price was short lived, and only 1 month later had we seen the gold price come crashing down to $1600 as investors began to realise that the gold price was overvalued. A huge sell off in the gold commodity brought prices tumbling and now there is little sign of another gold price rise, at least for the next month.