Gold price suffers again as a strong dollar helps push bullion under $1400

The price of gold is hurting bullion investors as six straight sessions of declines and a strong US dollar helps to push the precious metal back under $1400 an ounce and the slide could well continue into next week and beyond.

Latest Gold Price

Gold futures are currently at $1377.00 an ounce, or $35.25 lower after falling 2.5 percent yesterday. Including Thursday’s loss, prices have fallen 5.9 percent in six straight trading sessions. They settled Thursday at their lowest since 17th April.

Gold Sell Off – Forecasts

“One reason gold is selling off is that markets are less than a month away from the last sell off, and investors are wondering if there’s going to be an extension of that,” said Ole Hansen, head of commodities strategy at Saxo Bank. He forecasts that $1,300 to $1,302 an ounce should be the line in the sand for gold. “At that stage, we will have corrected 50% from the whole rally that started in 2008.”

Meanwhile, Ric Deverell, head of commodities research at Credit Suisse Group AG sees gold prices trading at $1100 an ounce in a year and below $1000 in five years. He says the lower prices are unlikely to lure more central bank buying. While central banks like to have diversified reserves, their managers wouldn’t want to lose money if gold enters a period of declines, he said.

“The need to buy gold for wealth preservation fell down and the probability of inflation on a one to three year horizon is significantly diminished,”

Fear over where the gold prices will head next is driving the market into uncertain waters. It’s anyone’s guess where the gold price will be in six months or six years. A sudden global crisis could trigger a massive rise in the price gold could just keep falling lower or crash below $1000 an ounce.

Gold and the US Dollar

The US dollar has generated headwinds for gold bugs, and this scenario is likely to persist during the short to medium term. Gold prices normally trade as a dollar currency, and has felt the pinch of a strengthening US dollar, as seen by strength in the US Dollar Index which is currently at 6 month highs over the 84 mark.

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Gold price suffers again as a strong dollar helps push bullion under $1400