It must be very encouraging news for many commodity investors that the US economy is recovering from the big shock it has been facing since long. It really took a long time for the economy to actually come to this state at least. The present status with the commodity market happens to be really contradictory. Gold is one such product of the investors which is highly traded in the commodity market. But, while the economic recovery is going on, gold is facing a deep decline and this decline happens to be the longest run of losses since 1997. One of the reasons why this price fall is taking place is the decreased holdings of more than 100 metric tons of the product just speculating the upcoming recovery of the American economy.

The present situation is not at all encouraging. Sources say that the prices of assets which were bullion-backed exchange-traded products have dipped to the lowest in the recent five-months and that there are still chances that they may fall further by 4 percent in the current month only. The holdings of the commodity have come down by more than five times of the net sales in the January month. The position taken by the Fed president justifying the asset purchasing program and the political turmoil in Italy also changed the market scenario. There are still expectations of people regarding the easing of monetary policy but the overall market is rather focusing on the possible bring-back of the monetary stimulus. The Fed Chairman also stated that the US Central Bank may not release any extra bonds merely because its high time they start thinking about the exit from the monetary easing policies.

Gold is one of those commodities which never had to look back for the price scenario for almost more than a decade. It has almost been 12 years that gold kept on attracting investors taking into account different reasons, may it be slumping prices of the equities, weakening of currencies or the chances of inflation. Gold never looked back significantly. Experts believe that gold is having a “troubling loss of momentum” and has not been able to keep the reputation of the commodity which can be bought and held looking for a handsome profit. This is why the economic recovery of the United States of America, along with the contraction of the holdings, has brought the gold prices down.

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