GOLD is going through an epic price rally after the gold price chart fell below $1,200.
Barrick Gold has dropped below $2,000 and has lost more than a third of its value.
Gold has been a favorite among gold investors and has risen more than 50 per cent over the past six months.
But it is also in danger of falling too far.
The US dollar has dropped more than 40 per cent against a basket of other major currencies over the same period.
Even before the gold plunge, gold had been surging, rising to around $2200.
The dollar has tumbled almost 50 per per cent since the start of the year.
What’s behind the gold rally?
The big question is: why?
Some of the reasons are simple.
While gold is still one of the best performing assets in the world, the global economy is in a recession.
Also, the central bank has kept interest rates at ultra-low levels, which have led to an oversupply of gold, which is now worth more than the world’s reserves.
In short, gold is a hot commodity but is a risky one, especially in times of financial turmoil.
So why has gold been so hot in recent months?
There are two reasons.
First, the world has been in an inflationary recession since the beginning of the decade.
Second, the US Federal Reserve has raised interest rates to unprecedented levels, making it more expensive for gold investors to buy gold.
Gold has also been buoyed by the US dollar’s drop since the end of the Great Recession.
It has surged by over $US4,000 on Monday alone, making the dollar more expensive than gold.
However, this surge has also brought a price correction, with the dollar falling to a five-year low of $US2,958.
That means the US is now the world leader in gold, and gold will be a key part of that leaderboard.
Why gold is up more than 500 per cent in the past year?
Gold’s share of the global market is up nearly 500 per a cent in just the past 12 months.
Source: Bloomberg gold price, gold,stock,gold,gold chart,stock market,gold source The Guardian article GOLD IS UP 500 PER A ROW IN THE LAST 12 MONTHS: Gold is up by more than $US10,000 a troy ounce in the 12 months to the end June.
Gold’s market capitalisation has more than doubled over the period.
Source the Guardian article The price of gold is expected to reach $US1,600 by end-June, up from the $US950 it hit last month.
Gold’s price has been on a roll since the US Fed raised interest rate rates to ultra-zero levels in December.
The gold price has also risen nearly 50 per a dollar.
Source The Guardian gold price is up $US1000 over the last 12 months, and it’s still trending lowerSource The Independent gold price peaked in the summer of 2011, before hitting a record high of $1.4million in 2013Source The Telegraph gold price surged more than 30 per cent from May last year to reach more than US$US2.6million in May this yearSource The Daily Telegraph gold is in free fallSource The Financial Times gold is going nowhere in 2016, and its still going upSource The Sydney Morning Herald gold is back in a free fall, but has been hammered by the China slowdownSource The Australian Financial Review gold is heading for another tumble, but its still in freefallSource The Wall Street Journal gold is rising again, but it has been battered by the Chinese slowdownSource Bloomberg gold is headed for another spike, but the Chinese market crash will make it hard for gold to rise more than half of the way to its current levelSource The AP gold price just hit a record $US8,500, and has been down by more halfSource The FT gold price hit another record on Monday, but is still headed for a more painful fallSource Reuters gold is trading at $US7,200, and is currently trading at a $US11,000 premium to goldSource Reuters Gold is falling for the second year in a rowSource The Economist gold is soaring againSource The New York Times gold prices are on a downward spiralSource The Associated Press gold is surging, but at a record lowSource The BBC gold is falling, but prices are still risingSource The Irish Times gold has been heading for a correction for a whileSource The Business Insider gold is currently trending downSource The Times gold price crashed to a new low in JanuarySource The Sunday Times gold hit a new record price of $AU4,700, and was at a new high of nearly $US9,500 last monthSource