Investors seeking alternative assets are moving on from
gold, whose failure to perform when its price was expected to rise and
recent volatility as demonstrated by Monday's price plunge are prompting
them to seek returns and protection elsewhere.
While the market's
bedrock of jewellery buyers and central banks has largely stayed
intact, the wider investment universe long courted by banks and gold
bugs is now once-bitten, twice shy.
Gold prices, becalmed since
February after two years of losses, fell to their lowest in five years
on Monday as heavy fund liquidation in Asian hours pushed prices down
through key chart levels, triggering a wave of stop-loss selling.
At
its Monday low, it had erased half the gains from a 12-year bull rally
that ran from 1999 to a record high near US$2,000 an ounce in September
2011. The slide was reminiscent of gold's dramatic retreat in the second
quarter of 2013, when prices fell nearly US$200 in just two days in
April, and another 11 per cent in June
.
Since then, gold has
largely underperformed even in the face of seemingly positive news. When
concerns over Greece's financial stability arose in the first half of
2010, gold rallied 13 per cent. This year, as the prospect of Greece
exiting the eurozone altogether hit markets, gold hardly moved.
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