A sell-off in gold that began on April 12 has intensified following dismal financial news from several of the world's largest economies. Observers, investors and pundits are trying to sort through the chaos to determine a precise cause, but regardless of the catalyst, it appears that gold prices have fallen by the highest degree since the 1980s.
As of the afternoon on Monday April 15, gold had lost nearly $140-per-ounce of value. This followed the 5.3 percent fall from Friday. Some financial institutions, including Goldman Sachs, had been predicting a so-called "correction" in gold markets, but there appears to be several other theories regarding why investors are jumping ship on the asset.
For starters, reports from the European Union suggest that Cyprus, in a bid to secure a larger financial sector bailout, may be coerced into selling a large share of their gold assets. While its unclear if the troubled island nation has begun divesting its supply, the perception that this action may take place could have enticed certain investors to dump their holdings beforehand.
There are also fears that China's economy, which has provided a much-needed source of growth since the 2007-2008 financial crisis, is beginning to slowdown. Statistical data from the Communist nation suggests that its manufacturing sector is beginning to buckle under the weight of excess debt.
Is it a good time to sell? While many are jumping ship, prudent investors should hang on to at least some of their gold if they do decide to participate in the ongoing drop. However, as gold has traditionally outperformed many asset classes and remains well over the lows from several years ago, it doesn't yet seem time to panic.
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