Gold sinks to 2010 levels

Gold fell to its lowest price for more than five years last week, as the precious metal was buffeted by the deal to avert a Greek bankruptcy, a potential US interest rate increase and a sharp selloff in China.

A wave of selling in Asia drove it down almost 4% to as low as $1,088 an ounce on Monday – before making attempts to recover throughout the week but languishing at around $1,079 on Friday evening. The last time gold has traded at that level was in March 2010.

Traditionally, the commodity has served as a safe haven during periods of uncertainty, but investors often move money into other assets once calm returns to stock and bond markets. Ten years ago gold was worth around $500 an ounce, but reached more than $1,800 in 2011.

Laith Khalaf, senior analyst at stockbroker Hargreaves Lansdown, said: “The yellow metal is traditionally seen as a store of value and a protection policy against catastrophe, both attractive features in recent years given the depth of the financial crisis and the devaluation of fiat currencies by central bankers cranking the printing presses. However, those worries have receded and with them so has the gold price.”