In September 2011, the market price of gold hit its all-time peak at $1,895 per ounce.
Almost three years later, on May 13, 2014, USA Today reported that the price had fallen to $1,293 — a 32% decrease. Now, according to the USA Today article, experts are saying the price of gold could continue its steep and steady decline, eventually reaching $800 per ounce or even lower.
As the U.S. continues to recover economically and tensions in Ukraine disperse, there will be little cause for gold prices to increase, USA Today reported. In a May 16 Market Watch article, it was reported that higher bond yields are also resulting in less demand for gold.
Overall, the outlook for gold looks grim — so what does this mean for people who use gold as an investment tool?
The market price for gold typically rises when there are crises and chaos in the world and people feel safer investing in precious metals than in paper currency. It’s unclear if anything will happen this year that will catalyze gold prices into recovery.
On May 16, the U.S. housing sector released data that strongly indicated the American housing market is well on its way to recovery; these findings sent the market price of gold further downward. Many investors expect the Federal Reserve will continue to lessen the number of stimulus programs that were put in place to support gold, according to investing.com.