Sharp fall in gold price - buying opportunity or shape of things to come

Author: Lawrence Williams
Posted: Monday , 05 Jul 2010
LONDON -

Thursday's sharp gold price fall seems to have halted with some recovery seen but is this a good time to buy or will there be further big dips.

There has been an expectation that any progress in the gold price would be volatile, but few probably anticipated the kind of almost vertical drop in price seen on Thursday where, at one time, gold fell around $50 in a few hours in U.S. trading, before stabilising. It then recovered a little in Europe and the East and then moved up a little more back in the U.S. on Friday, although only after a small blip early on.

Such volatility can be scary for uncommitted gold investors. The big question is whether this kind of volatility represents the start of a stair step downwards movement - similar to the upwards movement pattern seen over the past few months - or is a natural correction in the continuing bull market for precious metals. Read more»

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