Gold has fallen to a fresh four-week low today (May 16th) as the commodity continues to weaken after a rally on Tuesday.
It had been up by one per cent earlier in the week, but has now dropped to $1,369.29 thanks to factors such as higher equity prices and the firmer dollar.
Ric Deverell, global head of commodities research at Credit Suisse in London, told the Financial Times that one of the reasons for the fall in gold's value is that inflation fears have been easing in recent weeks.
He also pointed out that concerns over a markets meltdown due to a eurozone collapse have diminished.
"We're still seeing ETF liquidation. It's driving prices down," said Jim Steel at HSBC in New York.
Brian Lan, managing director of GoldSilver Central Pte Ltd in Singapore, told Reuters earlier in the week that investors are preferring stocks and shares over commodities such as gold at the present time.
Find out about commodities trading and learn CFD strategies at City Index
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.