Spot gold prices fell below $1,700 per ounce for the first time in almost six weeks as China, the world’s second-largest economy after the US, lowered its 2012 growth target to an eight-year low of 7.5 per cent.
While spot prices fell to $1,694.82at 1.30pm UAE time (9.30am GMT), a gram of 24ct gold was retailing in Dubai at under Dh200, its weakest showing in 45 days.
Yesterday, after the Chinese government’s announcement of a lower than the earlier forecasted 8 per cent growth target, the price of gold traded in a wide range between $1,695 and $1,720 per ounce in overnight trading.
Gold prices are down almost 9 per cent in six months even as analysts are predicting that the spot price will breach $2,000 per ounce – a gain of almost 18 per cent from current prices – in the next 12 months.
On the other hand, silver prices dipped only marginally today and were trading at $33.46 per ounce at 1.30pm UAE time. Silver has seen limited gains recently as the white metal is up 2.17 per cent in 30 days. However, that is on the back of a correction that it saw in February, and silver is still down almost 20 per cent in six months.
Marc Faber, the famous author of the Gloom, Boom & Doom Report, said yesterday that the price of gold could fall to under $1,500 per ounce. “In my opinion, the gold price correction is not yet entirely completed. I see significant support around the $1,500/oz level, but it could drop lower. It depends on global liquidity and on money printing by central banks. We could have a big correction if global liquidity tightens or they stop printing money,” Faber said in an interview with The Gold Report.
He further maintained that silver prices will, in the long run, track gold. “Gold and silver will move in the same direction, up together or down together. At times, silver will be stronger relative to gold, and at other times gold will be stronger relative to silver,” he said.