Gold Drops After Stock Gains and Geopolitical Stability

After two months of treading water, gold prices are starting to sink.

Futures in New York reached a 15-week low today after investors sent U.S. equities to a record high. Assets in global exchange-traded funds backed by bullion are near the smallest since 2009, and money managers have cut their bets on a rally by a third since this year’s peak in March.

Gold’s slump is erasing gains from earlier this year, when increased tension between Ukraine and Russia and a winter slowdown for U.S. economic growth sent prices to their biggest first-quarter gain since 2008. Goldman Sachs Group Inc. and Societe Generale SA are predicting the metal will extend 2013’s 28 percent slump. Futures have tumbled 9.1 percent from this year’s high in mid-March.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza