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Why is Gold Crashing?




Gold price crashed on Friday 12th April and continued its negative course on Monday 15th, reaching a minimum level of 1,360.60 $. Gold's fall of roughly 13 % in mid-April was the biggest drop since 1980.

Prime Values had predicted the 2013 gold crash. Back then, this stirred controversy, but behold: in mid April 2013, we've seen the first serious dip.

Further dips might follow amid deflationary forces and weakened confidence, while the US dollar is also gaining strength.


Find the primary reasons why gold crashed below...

 Gold has become "too expensive": small investors, stackers have slowed down in buying gold - most of those who really wanted to own "some gold" already own it

 Deflation: during a deflationary scenario, prices go lower and it's the same case with gold - whether hyperinflation will occur, remains to be seen, but for now we're struggling with deflationary forces (in the Western World and in Japan as well - global inflation is falling, as production and trade have slowed down)

 April was a good profit-taking opportunity: many have decided to get out of their positions now - gold being high enough in order to cash in a sizeable profit (those who invested in non-physical gold found a good opportunity to sell high)

 Profit taking in anticipation of further dips; stop losses triggering: many investors are ending their positions, taking profits, while automatic stop-losses are being triggered by the already bearish trend

 Gold demand decreased in 2012: and we're seeing the results now - you might want to check the earlier article about the gold demand decline in 2012

 Some countries are selling gold: Cyprus for example, has hit the news with their intention to sell part of their gold holdings (see Bloomberg's article on this)





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