Market hit as gold price declines 9% in a week

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Goldman Sachs lowers its year-end forecast price to $1,300 an ounce.

Jewellers and the market have been impacted by last week’s decline in gold price as it neared a three-year low.

The gold price dropped 9% last week according to Reuters, hitting $1,268.89 (£833) an ounce, the precious metal’s worst weekly performance since September 2011.

The fall was impacted by heavy sell-offs of precious metals after the US Federal Reserve chairman Ben Bernanke said it would narrow its $85 billion (£55.1bn) monthly bond buying programme owing to strong recovery in the US. The Federal Reserve’s purchasing is set to end by mid-2014, reliant on the country’s economic growth continuing.

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As a result of the Federal Reserve’s announcement, Goldman Sachs has cut its forecasts for the year-end gold price, to $1,300 (£843) an ounce, down from $1,435 (£930). The silver price is said to have fallen 12% last week to $19.35 (£12.55) a troy ounce, impacted by gold’s decline.

The drop also hit shares in Gitanjali Gems which fell a notable 20% on the National Stock Exchange of India, while fellow jewellery group Titan Industries declined by more than 4%.

The dip in gold price recorded in April impacted the opening schedule of the Scottish gold mine in the UK, while price fluctuations continue to affect the the UK high street. Pawnbroker H&T last month released a profit warning stating that the volatility of the gold price could negatively impact its profits by £2 million this year.

 

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