CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Gold drops below 1 200 per ounce level

Article By: ,  Financial Analyst
December 24, 2013 9:45 AM

Precious metals investors will be hoping 2014 is a more positive year for gold, which has dropped in value significantly in the last 12 months.

Gold has now fallen beyond the $1,200 (£735) per ounce level. A year ago, it had been pushing towards $1,700, so the precious metal may be losing its reputation as the premier go-to investment in times of financial disarray.

The precious metal has dropped about a quarter of its value in the last 12 months, which is its biggest annual fall in price for more than 30 years, highlighting just how rare it is for gold to perform as poorly as it has this year.

With the likes of bitcoin taking up a lot of column inches in 2013, investors may have been concerned that the precious metal was going to be usurped.

However, experienced stock investor John Paul Whitefoot recently told Daily Gains Letter that the virtual currency's volatility makes it less of a safe haven than gold or silver, so it will not replace either of these precious metals in portfolios any time soon.

The future of gold

Business and economy editor for BBC Scotland Douglas Fraser stated that the future could be a little brighter for the precious metal, due to the fact that its qualities are increasingly being deployed in nanotechnology – from solar cells to anti-cancer drugs – with nanotechnology patents for the use of gold growing sharply in the last few months.

Gold investors are likely to be keeping a close eye on the technology world, as gold is increasingly being adopted by companies operating in this sector.

Mr Fraser said: "In the average smartphone, there's 0.02 to 0.03 grams of gold, used in micro-chips for its conductivity, including the touch-screen function. That's one reason why recycling old phones can be lucrative, if it's done at scale."

The economics specialist noted that in 2008, when stock markets were hit by the global financial crash, gold was trading at $832 per ounce. It then rose to a peak of $1,837 in July 2011, but has fallen away from those highs in the last 12 months.

Find out about commodities trading and learn CFD strategies at City Index

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024