Gold price plunges to lowest level since 2011

Price drops to just below $1,500 per ounce, triggered in part by fall in US wholesale prices.

    There has been a slow but steady decline in the price of gold starting in the first few months of 2013 [Reuters]
    There has been a slow but steady decline in the price of gold starting in the first few months of 2013 [Reuters]

    The price of gold has fallen to a two year low at just under $15,000 per ounce.

    Gold for June delivery plunged $64 to close at $1,501 an ounce on Friday, the largest drop since February 2012. It was the lowest price since July 2011.

    The price has been climbing in the last 10 years. Prices were around $300 an ounce at the beginning of the millennium, hitting around $1,000 in 2007-2008, with the spike in price being triggered by global financial crises.

    One trigger for the slide was a government report on Friday that US wholesale prices fell in March by the most in 10 months.

    Investors tend to buy gold when they expect inflation to increase. Any indication that prices are not rising will prompt investors to sell gold.

    A proposal this week, later dropped, that Cyprus sell some of its gold holdings to help finance a bailout for the country also rattled the gold market.

    Gold has been declining this year on strength in the economy and expectations that US interest rates could increase.

    SOURCE: AP


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