Gold Prices Are Sinking Pretty Quickly

Gold prices seemed to be more or less stable to analysts a month ago. Erica Rannestad, senior analyst at Thomson Reuters, even called investing in gold a “safe haven.” However, the changes that happened to gold prices in May make most people question whether even the best analysts can be trusted.

Just a month ago, in April, most experts claimed that the forecast for the price of gold was positive. According to the Inquisitr, though the changes were generally accepted, they could only lead to higher prices.

“The price of gold fluctuates regularly. On January 22, 2015, the price of gold was $1,300 an ounce. Julian Jessop, head of commodities research at Capital Markets, predicts that the price of gold could reach $1,400 an ounce later in 2015.”

However, according to the most recent report of the Bullion Vault, it was just a matter of a several weeks for everything to go topsy-turvy.

“The price of gold has fallen from $1,232 to $1,180 over the past two weeks,” notes a technical analysis from bullion bank Scotia Mocatta.

“We had been bullish the metal while it held above $1,200…[but while] momentum is currently to the down side, in the big picture the metal has been a sideways trade the past two months.”

Some analysts trust that all the harm gold’s price drop causes to the U.S. economy is only temporary. However, according to the Bullion Desk, this assumption is highly questionable.

“At its last meeting, the Fed removed all calendar references in its forward guidance and said that recent economic weakness might be ‘transitory’ in nature. This means that bank is now entirely dependent on data so a rate increase could happen at any future meeting.”

“Unlike 2014, when growth snapped backed after a dismal first quarter as well, the stronger dollar and spending cuts by energy companies remain a drag right now,” Edward Meir, analyst at INTL FCStone, said. “All this puts the Fed in a rather awkward position of going through with rate increases (or at least one) in what are sub-optimal growth conditions, but the central bank really has no choice at this point, but to proceed.”

After such an unexpected twist one should be quite bold to predict how the prices of gold will change in June. Hopefully, they will rise significantly again, for the current state of gold prices can only be viewed as a disappointing one.

[Photo Illustration by Scott Olson/Getty Images]