FX.co ★ Gold's great sell-off

Recently, more and more large and small investors have been averse to gold. For many centuries, the precious metal has been considered as one of the most safe haven investments. But now in the days of high technologies, patent rights, and whopping volumes of currency markets, investors can find more beneficial offers. As international agencies say, worldwide gold ETP assets are reducing at a steady pace. They have already reached a 5-year low. Market participants say it is the most continuous slump in gold holdings. The four-week decline cut the figure by approximately 35 tons. At the beginning of the previous week, the holdings shrank by another 5 tons. The remaining balance is 1,735 tons. It is a low of February 2009. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, was hit the worst. For a month it lost 30 tons that led to the smallest balance of 794.14 tons so far this year. Early last week, the gold price fell to $1,279.7 per ounce, touching a 2-month low. The statistics showed gold depreciated by 3,7% within six days. Investors are selling off the yellow metal on political tensions. “The majority of investors admit that gold is still a safe haven asset, so de-escalation of the Ukrainian conflict cooled demand for safe haven assets”, said Vladimir Bragin, Director for Financial Markets and Macroeconomics at Alfa Kapital. Moreover, low inflation in the EU is adding some pressure. Amid such conditions, investors tend to invest in emerging markets and riskier assets. The US statistics and the EU reports raise confidence as well. “Bright statistics on the US economy and low inflation in the EU with low interest rates make risky assets more attractive, especially on the US stock market”, Vladimir Bragin noted.