Two percent drop follows US Federal Reserve’s cut in asset purchasing.
The gold price fell to below $1,200 yesterday, the lowest it has been since June 2013, following an announcement from the US Federal Reserve that it intends to ease its monthly asset purchasing.
Bullion prices fell by 2% to $1,193.60 (£730.28) following the news. It is understood the Federal Reserve will curtail asset purchases by $10bn a month, from January 2014.
The Federal Reserve said the US economy was finally strong enough to scale back its bond buying programme. According to the Financial Times, expectations of an end to the US monetary stimulus programme has reduced the gold price by more than 25% this year, its biggest drop in 30 years.
The gold price has continued to fluctuate in recent weeks, with prices gaining at the end of October. However the price has experienced an overall decline in the past 12 months; at the close of the market yesterday, the gold price stood at $1,192.10 (£729.36) per troy ounce, compared to the figure of $1,677 (£1,026) per ounce recorded on the close of December 31 2013.