The golden slide

Since last October, the price of gold has been receding on a larger trend. Even tensions from North Korea seem to have left minimal impact on gold investors. The only monthly gain in prices of the precious metal was seen recently later in March, when it took a crisis as colossal as Cyprus bailout deal to shake up the bullion market.
More than any fundamentals, it is market perceptions and the allaying of investor fears that have pushed gold market southwards.
Previously, as the US Fed announced bond-buying policies to prompt economic stimulus, inflationary fears had been stoking gold demand due to the inflation-induced reduction in the greenbacks value. As signs of US economic recovery gain traction, investors expect the bond-buying programme to halt and for the dollar to gain back its glory status.
In the meanwhile, the dollar has been gaining strength since earlier this year, getting stronger against key currencies such as the euro, Japanese yen and the British pound.
Thursdays drop to a 10-month low was also rather unique. Gold fell as low as $1,541.14 an ounce, its lowest since May, and stood at $1,551.61 by late yesterdays trade.
Previously, the rise in US equities with signs of improving economic recovery had led to investors losing interest in gold. On Thursday, however, disappointing US economic data led to a decline in US equities, forcing investors sell gold to cover their losses, bringing gold down again.
Yet, despite the recent disappointing economic reports on private-sector jobs growth and service-sector activity in the US, the outlook for gold remains unimpressive. Credit Suisse slashed its average price forecast for gold this year 9.2 percent to $1,580 a troy ounce and its 2014 average price forecast 12.8 percent to $1,500/oz.
Overall, investor interest and the hype about gold have mellowed down. Even though the eurozone crisis still abounds and USs gloom days are not completely over, investors are seeing these as less of a threat now.
"Investors have pushed the gold price sharply higher...with the past five-year rally driven by fears that aggressive central bank quantitative easing would lead to very high inflation... we are beginning to see the economic conditions that would justify an end to the Feds QE, fiscal stabilisation," aptly summed Societe Generale - a French multinational banking and financial services company - as quoted by the Reuters.