Gold prices lose some of their shine

By Dennis Seid/NEMS Daily Journal

TUPELO – Almost two years ago, gold traded at more than $1,800 an ounce.
With the economy struggling to find traction, many investors fled to the precious metal, seeing it as a hedge against inflation and the declining value of the dollar.
But the bull market for the precious metal has turned bearish, with prices falling below $1,200 last week.
While it climbed $32 to close at $1,255.70 an ounce on Monday, gold was down 23 percent in the second quarter, its worst quarterly decline since the mid-1970s.
According to U.S. News & World Report, billionaire George Soros cut his position in a gold exchange-traded fund by 12 percent earlier this year. And investors in gold-backed ETFs have liquidated nearly 19 million troy ounces of their holdings since January.
For jewelers like Patty Thompson of Way-Fil Jewelry, it’s a good news/bad news situation.
People looking to sell gold aren’t getting the prices they had hoped.
“I’ve had several people sell their gold because they’re afraid prices will keep falling,” Thompson said.
But falling prices benefit other customers.
“On the other hand, there are a lot of people asking about new gold chains,” she said.
Falling prices also are an opportunity for those who insist on investing in gold.
However, Michael Gayed told U.S. News timing the market is never a good idea.
“When you have such movements of volatility, there is a temptation to want to catch a falling knife,” he said. “That, to me, reeks of a bad move because you are trying to time an investment that is in something of a free fall.”
Thompson agrees. She’s seen the volatility of gold throughout the years, and said the recent decline isn’t surprising.
“I’ve seen it before,” she said.
dennis.seid@journalinc.com