Gold slump continues
Gold is currently undergoing its longest decline in more than four years and according to Goldman Sachs, it’s set to get worse. Hedge-funds and self directed investors alike are dumping the precious metal from their portfolio’s at a rate of knots, with legendary investor George Soros leading the way. The billionaire sold large chunks (rumoured to be 12%) of his funds holdings in the last quarter, while it is thought that Cyprus did the same in a bid to raise funds for its banking bailouts in April.
Gold futures saw a decline of 5 percent last week alone, falling to $1,364.70 an ounce in New York. A large majority of analysts predict that the current slump will continue throughout this week, with investors seemingly agreeing. Short contracts on gold have increased by more than 7,000 to 74,432 according to the Commodity Futures Trading Commission, the most ever recorded.
Goldman Sachs was quoted as saying in their recent May 14th report that the recent decline “has been faster than we expected”. The reason for decline has been attributed to the giant strides that financial markets around the world have been making, encouraging investors to remove their wealth from bullion and into the markets where they will be rewarded with a better yield.