Gold Prices Decline, Following Worries About Growth
The global economy’s outlook got gloomier on June 22, when the prices of gold went downhill following weak market reports and worries about growth. Global gold prices fell by around $17.27 early Friday morning, to reach $1,588.75.
Other commodities, including silver and crude oil, also suffered a drop across all markets as the dollar gained against the Euro. The price of gold seemed to continue its trend from the previous day, when it started to decline after the US Federal Government announced the extension of Operation Twist.
Feds Caused the Drop in Prices
As it seems, the US federal government’s disappointing decision, regarding the monetary stimulus for bringing down the long-term debts, was the main reason for this drop in gold prices.
The decision was made late evening on June 20, leading to over 1% drop in the prices of gold on the June 21, the biggest one-day drop since January 2012. Besides the poor monetary stimulus by the federal government, reports of weak economic reports from China, Europe and the US also added to the pressure. By end of the day, gold dropped by 2.5%.
How the Others Fared
Along with gold, other commodities and stocks also got hit on the June 21. Silver, which is seen as both a precious metal and an important industrial component, dropped $0.41 to reach $27.59 and Brent crude oil ended the day at an 18-month low. Stocks across the world went down by 2%, as manufacturing activity slowed down in the US, European and the Chinese markets. The US stocks reached their lowest in three weeks, adding to the losses, after investors heeded to Goldman Sach’s advice for shorting the S&P 500 benchmark index.
The S&P index wend down by 30.18 points,which is a drop of 2.23%, to reach 1,325.51, while the Dow Jones index reduced by 250.82 points, dropping by 1.96%, to reach 12,573.57. The NASDAQ composite index also went down with gold prices, as declined by 71.36 points to reach 2,859.09, a drop of 2.44%. Among other commodities that dropped during the day were palladium and copper.