Investors are running out of reasons to own gold. The price of the metal, which is often seen as a hedge against inflation and a weak dollar, slumped to its lowest in five years on Monday.
The dollar has rallied in recent months, diminishing the allure of holding gold.
The U.S. economy has been on firmer footing, and tumult in China’s markets and Greece’s debt crisis have failed to restore gold’s appeal.
The price of gold had surged in the years immediately after the 2008 financial crisis, topping out at nearly $1,900 an ounce in August 2011, as investors anticipated that the Federal Reserve’s ultra-low interest rate policy and huge bond-buying program would undermine the dollar and lead to inflation.
Instead, inflation has remained subdued and the economy maintained its recovery, albeit at an uneven pace. That has boosted demand for the dollar.
On Monday, gold sank another $25 to $1,106 an ounce — about 40 percent below its recent peak and the lowest price since March 2010.
When investors are worried about the U.S. and the global economy, they tend to favor
gold, analysts said. The Associated Press
