As Gold Prices Continue to Fall, Experts Look Forward

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On Wednesday, May 28, gold prices fell to a 15-week low as a result of an influx of investment in U.S. equities, according to Bloomberg.

The decline in the price of gold essentially makes null the gains it made earlier in the year, when tensions in Ukraine and the winter economic slowdown gave the precious metal its biggest first-quarter gain since 2008, Bloomberg reported.

Typically, the price for gold increases when there is increased demand due to turbulent world events or an economic recession. In 2011, gold prices hit an all-time high as concerns about debt in the United States and European countries reached a fever pitch, exceeding $1,900 an ounce. Since then, however, its value has been on a slow decline. In 2013, the price of gold fell about 28%, according to Bloomberg.

Gold’s failure to recover could spell bad news for individuals still hoping to sell their gold. On average, gold trade-ins will earn the seller about 55% of the gold’s market value — this percentage varies depending on buyers’ rates. With the market values going down, gold sellers’ earnings will go down as well.

“I don’t see any reason for gold to go higher,” James Shelton, who assists in the oversight of $2.1 billion as chief investment officer of Kanaly Trust Co. in Houston, told Bloomberg. “Equities continue to be the choice of investors. Unless inflation suddenly flares up, I would bet on lower gold prices.”

However, some experts remain optimistic for gold’s future, as it is a popular choice for long-term investing.

“Every time there is political turmoil, people will come back to gold,” Tom Winmill, who co-manages about $180 million of assets for Midas Funds, said. “Also, when the fabricators and merchants come back, there will be an upward move in prices.”

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