Tuesday, 13th June 2006 (3188 views)

The price of gold has slipped below the $600 an ounce mark for the first time in over two months today (Tuesday, June 13th).

The US dollar's rising strength and the overall weakness of the stock markets are what analysts have identified as reasons for the slump in gold prices.

The weaker oil market prices have also led to gold dropping in value. Oil and gold prices frequently fluctuate in tandem as they are traditional hedge stocks, often heralded as 'safe bets' for investors when other share prices in portfolios are sliding.

There is currently concern that fears over a possible rise in interest rates in the United States could see gold prices dropping even further below the psychologically significant $600 barrier.

"Investors don't want to take new positions in gold when they aren’t sure about the outlook of US interest rates," Hiroyuki Kikukawa, the associate director of Nihon Unicom, told Business Day.

Following its quarter-century highs around a month ago, gold prices have fallen sharply, losing over $130 an ounce from their price since May 12.

 

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