The price of gold crashed 9 % this past week making it the market’s worst ever performance in two days for the past 30 years, resulting in the end of the decade-long boom and staring the bear market territory. This surprising turn of events led to a dive in other shares and commodities.

The CME hiked two precious metals (silver and gold) margins by 18.5 % in the hopes of dampening the speculative purchasing ability by coercing traders to put in more of their investments.

The rather slow demand from the weakening Chinese economy was attributed after disappointing figures shocked markets with economic growth coming in at an annual rate 7.7 % which was well below the expected margin of 7.9 %.

With the current crisis in Cyprus which is creeping its way to the rest of the economic world, the ECB chairman has already said that the government might possibly sell its gold reserved as a part of their bailout contingency. Hints that central banks in the US and the UK could finally see an easing off the printing presses will also hit the price eventually.

The market had been boosted in recent years by strict investors who are basically looking for better ways to safeguard themselves against the effects of inflation by central banks printing notes.
The Eurozone crisis has sent funds into a safe haven such as gold, with the growing economy of the Chinese has bolstered the prices of commodities across the economic market. The idea that the precious metal represents a safe asset took a downfall earlier this week upon losing almost 12 % of its value which was its largest dip in thirty years. Presently, it is now down more than a quarter of its peak of $1,921 in September 2011.

Experts speculate for further future declines

There has been a rumour circulating that Cyprus might be obligated to sell its gold reserves and a probability of lesser quantitative easing following Japan’s warning by the US Treasury as basically a foreign exchange manoeuvering have sent gold to its two-year low stake.

Other markets also didn’t quite fair well with several companies sliding down below their average. Commodities also took a beating with silver going down 0.41 % to $22 .78 and crude oil prices plummeting 4.27 % to just $87.20.