Gold has plunged to its weakest in two years.
Investors ditched it on fears of central banks – like Cyprus, and maybe other weak eurozone economies selling some of their reserves. In addition larger countries in the region could look to cash in on huge rises by gold over the last decade.
From the start of the year the price is down three hundred dollars.
On Friday a five per cent slide pushed it below fifteen hundred dollars a ounce. On Monday the sell off accelerated.
The feeling among gold bugs is that central banks could halt their stimulus measures this year, that would cut gold’s appeal as a hedge against inflation.
Silver prices are also on the slide.
China’s economic recovery unexpectedly stumbled in the first three months of the year.
GDP grew by seven point seven per cent from a year ago, as factory output and investment spending slowed.
That was slower than the 7.9 per cent in the fourth quarter of last year.
As a result analysts are rethinking and reducing their full-year forecasts despite official insistence that the outlook is favourable.
China has set a 7.5 per cent GDP growth target for the year.