September gold prices dip by 11 percent

Gold Investing Strategies

September gold prices dip by 11 percent

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It isn't something that people anticipated, but many still took it as a surprise that gold was actually bound for a correction very soon. As panicking investors all over the world scramble in order to sell of their nervous assets in favor of more stable havens, gold was surprisingly part of the lot that had lost a large chunk of its value, losing about 11 percent of its value in September, the largest monthly drop that gold has ever seen for the last three years.

Gold has been rallying to record high in recent months, backed by the financial crisis that shook the entire world. It's far from over and there's already expectations of a double-dip recession, so hiking up gold's price was just natural phenomenon. What was not natural was the recent drop in the price of gold, which came along with the drop in price of equities. Why would gold ever drop in price along with equities, of all assets?

There are many reasons given out, but a lot of analysts point to the massive sell-off of investors, who, uneasy with their losses in other asset classes, decided to sell off their profitable precious metals in order to make up for these losses. As they say, there are not too many smart investors out there. Sadly, they are the ones who have a good control over the price of gold. There are also fingers pointing at hedge funds, who have cashing out on their bets on a gold price spike during the last 18 months or so.

The good thing about this is that, in general, the price of gold this quarter is still about eight percent higher than the previous one. This is the largest quarterly gain in the price of gold this year with speculations that the price of the precious metal will start to rise back again before making more corrections in the future.

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Tags: • analysts • equities • recession • expectations • correction • hedge funds • precious metals • financial crisis • gold prices • price of gold •

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