Gold Price Drop Sharply

Futures gold trading fell sharply. Why is gold price drop sharply? There are many reason which affect the current gold price.

China's financial support plan to help Europe's debt crisis. China was reported to be buying some bonds from countries affected by the crisis. This situation will reduce demand for precious metals.

The price of gold drop to its lowest in three weeks, as a signal that European banks have the funds until the end of the year, thus eroding the concern that the crisis in the region could get worse.

European Central Bank (ECB) in coordination with international policy makers, providing loans in the form of U.S. dollars to banks as an aid in the face of the credit crisis. Conversely, stocks actually go up in the United States and Europe, along with Germany and France to ensure that Greece would remain a part of the European Union. Moreover, China plans to buy bonds in Euro.

The decline in gold prices is a sign of a spontaneous reaction to the statement of the ECB, where people see as something positive for the European economy.

In trading on the Comex, New York, at 1:56 PM local time, on the trading price of gold futures for December delivery drop USD 45.10 or 2.5 percent, to price position of USD 1781.40 per troy ounce (equivalent to 31.1 grams). Earlier, gold had touched lows on August 26, 2011, at the position of USD 1775.