Gold prices have plummeted at international market amidst improving U.S. economy and aftermath of Cypriot crisis. Gold, trading at around USD 1,570 per ounce, has plunged to touch a two-year low price level, just above USD 1,300 an ounce on the 15^th of April. Following the trend of the yellow metal, silver has also fallen significantly at international market and is currently trading just above USD 22 per ounce at international market.

In line with improving U.S. economy, supported by economic variables like optimistic employment conditions, improving consumer market and industrial outlook, the market has lately shifted towards the alternative investment markets like securities, fixed deposits, housing et cetera. As the U.S. economy is expected to continue the ongoing optimistic economic momentum, with improved market sentiments and business confidence, the buoyant market for the precious metals have lately moved to other forms of investments. Economists and market participants believe that the definition of safe haven has changed for the time being, considering the brighter horizons evolving out of the largest economy of the world.

Further, as Federal Reserve (Fed), the central bank of the U.S., is sought to curb the ongoing monetary stimulus amidst improving U.S. economic indicators, especially, unemployment situation, with the sought market fundamentals concerning quantitative easing and Fed’s possible action on curbing the ongoing easing, the market confidence in the U.S. has rallied significantly. The notion of reviewing and possibly halting the ongoing quantitative easing program has also eliminated the bulls for the gold and other precious metals.

Beyond the U.S. economy and related economic fundamentals, the liquidation of gold reserves by the central bank of Cyprus to resolve the national debt issues has also contributed to the falling gold prices. As the supply side of the gold market is expected to take charge at international metal market, the gold market is still heading towards the south amid demand outshined by the supply side.

Despite some have sought the gold prices to head further south and other towards the north, only time shall tell where the yellow metal would head from its two-year low level. For now, the world is certainly watching the path of gold!

Note: This blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.