Gold price drop ‘took investors by surprise’

<p>Investors were not expecting the recent fall in gold’s value.</p>

The recent drop in the value of gold took a lot of investors by surprise, it is claimed.

According to Towry's head of investment Andrew Wilson, the losses recorded by the precious metal in the last couple of weeks have been "dramatic".

He suggested that the sudden drop in the commodity's value suggests there is "more going on than meets the eye and that someone may need to use their gold proceeds to fill a large hole elsewhere in their portfolio".

The price of gold dropped quickly after it was revealed Cyprus is considering selling off its reserves of the precious metal in order to ease its financial difficulties.

Mr Wilson noted the drop in gold's value shows the importance of diversification to investors, who are able to reduce the risk to their wealth by spreading it across a wide variety of assets.

Gold bounced back yesterday (April 17th) and was up one per cent shortly after falling to a two-month low for the precious metal.

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