Gold has fallen a lot recently.

Seems strange given the massive bail outs of Fannie Mae and Freddie Mac, which would reasonably be expected to reduce the value of the dollar.

At the same time a war has started next to the only independent (of Russia) oil pipeline into Europe. Again might reasonably expect oil (and gold!) to rise.

Yet gold has fallen even further.

Am i missing something - why is gold falling?

You're not the only one who's puzzled.

Some opinions here.

SEASONALITY

You guys need to understand that gold is very seasonal. Due to local buying customs it usually does very well between Sept and March each year. We are currently just coming to the end of a dormant period (April to August).

is that effect up to 30%? seems a high fall especially given the other factors i mentioned. i will take a look at the price history

Can seasonality explain such a short, sharp fall?

Funds are moving their money around, hence the falls in commodities recently.

Much of the world's gold is now held in ETFs, which are very liquid and thus prices will now move much more dramatically than in the past.

But 70% is sold as Jewellry which usually sells a lot more between Sept and March.

in the telegraph article on the new blog yesterday, it said Goldman's had gone short on gold.

as the queens of market manipulation - that possibly means there is some more government intervention going on with Goldman getting the usual inside information.

All this talk about supply and demand, manipulation etc is wrong. The single largest driving force in the price of gold in the dollar. If the dollar rise against the euro you would expect the dollar to buy more units of gold and the euro less and vice versa. What is strange is that as the dollar falls gold rises in both currencies and vice versa. The whole of the gold price rise and fall is explained by the price of the dollar. I can sit here and watch the gold price and USD-EUR rate move in sync tick by tick. If USDX were to fall to 70 from its present 77 the gold price would be over $1000 oz, its $30 for every point, without any change in any fundamentals. You need look no further.

Goldmans ARE the manipulators !! anyone can see that... its one mothcrushing gigantic hedge fund!!

So if I were to look at a history of Gold Spot in Euros you are saying there won't have been a fall?

sounds like the gold price fall was due to an unwinding of the positions of lehman, merril and the rest of the "most selfish idiots in the room" took.

Yes there has been a major panic in the commodity markets this morning - look at oil!

Although gold may fall heavily in the medium term as I've heard it's rubbish in a deflationary environment.