Gold prices have worst month in years
Gold prices have been quickly dropping over the last month.
Steve Chiotakis: The price of gold has dropped several hundred dollars an ounce in just a few months, set to record it's worst month in nearly three years.
Marketplace's Stephen Beard is with us live from London to talk about it that story. Good morning, Stephen.
Stephen Beard: Hello, Steve.
Chiotakis: I know for years, the story about gold has been, oh, it's going up and up! What's going on now?
Beard: It's not going up anymore -- it's going down. The price has more than doubled since 2008; in August, it hit $1900 an ounce. But it has now fallen back more than $400 since then.
Chiotakis: What's driving the price down, Stephen?
Beard: The key factor seems to be the dollar, and the U.S. economy. That's what drove it up -- a big part of this was concern about the sputtering U.S. economy, and the fact the Fed was printing a lot more dollars to keep the wheels turning. That worried international investors. They thought, you know, too many dollars sloshing around -- let's get out of the dollar and into something we can trust, a finite supply like gold.
Now in recent weeks, there's been signs of improvement in the U.S. economy. Stephen Lewis, a currency expert with Monument Securities, says that's attracting investors back to the dollar.
Stephen Lewis: There's rising consumer confidence in the U.S.; there's an improvement in labor market. And so that encourages a shift of funds into the dollar. In rather thin markets, this is pushing up the dollar exchange rate.
Gold is bought and sold in dollars. If the dollar in your pocket is stronger, it buys more gold; gold becomes cheaper, the price falls.
Chiotakis: Marketplace's Stephen Beard in London. Stephen, thanks.
Beard: OK Steve.