Even gold is dropping

In times of uncertainty, what better than to invest in a bit of gold: it's solid, it's dependable, and its value never, ever changes.

Except that this week gold fell ten percent from its recent peak of $1,876 in London, and by the end of trading on Tuesday it was down for the third day in a row.

Gold has been feeding off the fears of an economic meltdown in Western countries, and any artificial stimulation of economies is likely to impact negatively on the precious metal. Analysts from CMC Markets have compared gold's afflictions with the sell-off that hit silver badly. Colin Cieszynski, an analyst, said: "[Yesterday morning's] $100 per ounce plunge in the gold price echoes the rise and fall of the silver price earlier this year. Recall that silver staged a relentless drive last spring, outperforming gold by a country mile.

'After driving from near $35 per ounce to retest its 1980 high near $50 per ounce, silver plunged back to the low $30s in May and has started to recover in recent weeks after two months of base building.'

Luckily, by 8pm last night gold seemed to be staging a recovery, and was up $3 at 8pm – though whether this is a permanent correction we're just going to have to wait and see. Oh yes we are.

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