By Daina Lawrence
The Globe and Mail
Gold has definitely lost some of its lustre for investors as market volatility, global inflation fears and a beat-up gold mining sector have forced prices to drop about $700 (U.S.) an ounce in less than three years.
“Coming out of 2001-2002 with gold at $259 an ounce, you saw a growth or an increase in inflation, you saw increases in demand, and gold rode a pretty good ride from then all the way into 2010,” says Michael Levy, a business analyst and president of White Rock, B.C.-based Border Gold Corp. “I mean, we went from $260 an ounce up over $1,900 an ounce.”
But this precious metal’s heyday came crashing down in April when prices plummeted — a mini-crash marked by a four-day tumble of nearly 15 per cent to $1,323 an ounce on April 15 — because of frantic sell-offs amid fears of global inflation and quantitative easing decisions by the U.S. Federal Reserve. Since then, gold has yet to regain significant traction, hovering at or below about $1,300 an ounce, which signals a palpable fear among investors, according to those tracking the sector. Global events can also affect the price, such as the recent Iran nuclear deal, after which December bullion dropped to $1,241 an ounce, as its safe-haven appeal was dampened.