Gold abundance in markets led to prices decline

Gold prices are expected to settle at USD 1,800 per ounce at the beginning of the fourth quarter of 2012  An abundant availability of the precious yellow metal in markets due to an increase of production in the mines have led gold prices to decline; the eurozone crisis has also overshadowed this drop, a specialized report said on Tuesday.

A report by GFMS Ltd, formerly known as Gold Fields Mineral Services, said that this year will see less of gold jewelry since there is a sharp fluctuation in pure gold prices and a sharp drop in consumer spending. Surplus of the yellow metal is expected to grow higher during 2012 if  “investors and government does not step in to purchase the existing surplus in the markets,” the report pointed out.

Investors are starting to fear for their monetary investments after official statements from the eurozone leaders and the United States indicated that they would have to induce a new quantitative easing in the next period after “disappointing results” in trying to simulate economies of the US, Greece and Spain. The gold markets maintain a state of uncertainty for the “upcoming period,” the report noted. It went on saying that even though gold prices are facing a recession, yet the markets are seeing an upward trend in buying the precious metal. Gold prices are expected to settle at USD 1,800 per ounce at the beginning of the fourth quarter of 2012.

GFMS Ltd was formed in August 1989. It is a leading independent precious metals consultancy specializing in global gold, silver, platinum and palladium market research.