Gold close to three-year low

<p>Gold is still dropping in value.</p>

The value of gold is continuing to fall and the precious metal is now close to a three-year low.

Even though many countries around the world are still struggling to recover from the recession, the precious metal's reputation as a safe haven has not seen its value hold.

Gold has now slid nearly $200 (£131) an ounce in the last ten days and has fallen to below $1,225 an ounce, reports Reuters.

Axel Merk, chief investment officer at Merk Funds, an organisation which oversees about $500 million in mutual fund assets, explained investors are cautious about gold.

He said: "You don't want to catch a falling knife, so people who might be buyers are stepping aside and don't want to show gold at their quarter-end statement."

Gold hit a 34-month low earlier in the week and the value of the commodity is down by more than 23 per cent for this quarter alone. The precious metal could be set to record its biggest drop since 1920 in London, Bloomberg recently reported.

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