By Tony Field
After hitting US$1,900 an ounce - gold has fallen almost 20 percent over the past few months, and investors are having second thoughts about whether it is a safe haven in troubled times.
“People have been buying gold for the past couple of years, a lot of speculators in that very crowded trade and so as it started to tumble people started to get out – not so much lose money as take their profits,” says Derek Rankin of Rankin Treasury.
The New Zealand dollar price has also been volatile – down in October, up in November, down again this month.
Back in October a one kilogram gold bar cost around NZ$76,000, now it sells for around $71,500. That’s a fall of six percent.
The US gold price edged up around one percent this morning, and there are plenty of people who think it will go higher.
“We are actually seeing a lot of people buying at the moment which is sort of an indicator that the local bullion market at least is looking more long term than short term,” says Micahel O’Kane from NZ Mint.
“Certain central banks around the world have large holdings of gold – the French and the Germans are actually very high holders of golf and looking to acquire more. There are a lot of players in this market and the fall in gold I still see as relatively temporary,” says Derek Rankin.
Just like with commodity and stock prices, the volatility looks set to continue.
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