Goldealers Blog

Gold Prices Fall Sharply

Gold Prices have fallen very sharply this week with the Gold Price market closing at £966.50 per ounce this weekend. The general public, seeing how sharply the gold prices have dropped are rushing to sell their gold to Goldealers Ltd in the belief that that we are at the end of a 12 year bull run. Goldealers runs the numbers and shows you in plain English what this means for you if you have an item of jewellery or some gold at home that you are debating whether to sell.

WC 8 April Gold Price Chart

WC 8 April Gold Price Chart

It may no longer be safe to hold the ‘safe haven’ precious metal – Ahmet Soormally (Director) Goldealers Ltd

Gold prices have dropped from a high of £1016 per ounce on Friday 12th April to £966 per ounce. This means that in 1 day, gold prices have dropped by a massive 4.9% on Friday alone.

The Gold spot price hit a high of £1038.69 per ounce during week commencing 8th April. Meaning that in one week, the gold price has dropped by 7%.

Turning gold to cash price comparison

The above numbers mean absolutely nothing to the average Joe who has some gold jewellery sitting in their jewellery box and is waiting for the perfect time to sell their unwanted jewellery.

The table below shows a simple before and after bullion equivalent value for the value as a price per gram for your jewellery. The table shows the value at it’s highest point during week comencing 8th April 2013, The highest point on Friday 12th April 2013 and the current value at time of writing (market close).

This drop in price is the equivalent of the fuel price dropping from £1.40 to £1.30 per litre.

Item Highest Value
W/C 8 April 2013
Highest Value
Fri 12th April 2013
Market Close Value
Fri 12th April 2013
1g 9ct Gold £12.52 £12.25 £11.65
1g 14ct Gold £19.48 £19.05 £18.12
1g 18ct Gold £25.05 £24.50 £23.29
1g 22ct Gold £30.61 £29.94 £28.47

In case the above numbers mean absolutely nothing to you, after all – nobody actually really knows how much their jewellery weighs – most people would only be able to classify their jewellery as being fine, light, heavy or very heavy – hopefully the below table will further put things into context.

Item Highest Value
W/C 8 April 2013
Highest Value
Fri 12th April 2013
Market Close Value
Fri 12th April 2013
10g 9ct Ingot Pendant

10g 9ct Ingot Pendant

£125.20 £122.50 £116.50
Full Sovereign Gold Coin

Full Sovereign Gold Coin

£244.22 £238.96 £227.25
130g 22ct Indian Gold Jewellery

130g 22ct Indian Gold Jewellery

£3973.30 £3892.20 £3701.10

Reasons to sell your gold now

Gold prices have fallen sharply as global stock markets bounce back. At this point it looks like gold has gone over a cliff – AT Global Capital portfolio manager Stephen Klein according to Wall Street Journal

Speculation that US Federal Reserve could wind down stimulus measures sooner rather than later. For those of you who are not aware, Stimulus Measures are economic measures put together by government to stimulate a floundering economy. This is done with the intention of reinvigorating the economy and prevent or reverse a recession by boosting employment and spending. If the US Government does wind back stimulus measures, this is a strong indicator that the US is well on the way to coming out of recession. Investors turn to gold during times of hardship and recession.

Fears that sales of the precious metal forced on Cyprus mean that this could lead to wholesale dumping by hard-pressed countries in the coming months according to the Guradian Newspaper.

Analysts have been predicting that 2013 could be the year that gold ends its bull run. A bull run occurs when investors believe the positive trend will continue for the long term.

Reasons to Hold or invest in gold

Whilst it is true that the Gold price has dropped below £1000 an ounce, it also did this on 30th April 2012 – exactly 1 year ago dropping to £985.19 per ounce. Following 30th April, gold prices rallied and by September 2012, it hit a year high of £1103.67.

In Shanghai alone, gold deliveries alone was over 400 tons in less than a month and a half.

Goldealer’s Opinion

The gold price has always been sentiment driven. That is that when there is economic instability or fear, the gold price increases. The price indications are that sentiment has changed. This may or may not be the case for the United States, however the reality is that Europe is still in serious trouble. If more European countries are forced to sell off their gold reserves, and the economy continues to show signs of improvement in the US, and investors continue to take money out of gold to make shorter term quick gains in the stock markets – the future for gold in 2013 will not be a good one.

Gold investors who believe that this is just a dip in the market could potentially make fortunes if the gold price rallies again. They could also stand to make substantial losses if gold does lose it’s luster.

If only fuel prices could show the same trends so that once again petrol becomes affordable.

If you would like a no-obligation valuation for your jewellery, please do not hesitate to get in touch with us by email info@goldealers.co.uk or telephone 01206 585 000. We accept postal customers as well as counter visits.