Gold prices plummet to 6-year low

NEW YORK, Gold’s monetary value fell to its lowest point in about six years Friday.

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Due to what industry analysts say is a strengthening U.S. dollar, an expected rate hike from the Federal Reserve and an apparent Chinese stock market slump, the precious metal’s prices temporarily fell to a longtime low of $1,051 an ounce.

The commodity’s price closed at $1,055.90 on the New York Mercantile Friday, CNN reports. The price indicates gold’s decline in popularity since reaching its highest price of $1,890 in 2011.

The metal hit its lowest value in Feb. 2010 at $1,045 an ounce.

The drop is suggested to have occurred due to a possible rate hike to be decided by the Federal Reserve in the coming weeks. In preparation, investors have decided to sell before they are affected. Reserve executives will meet starting Dec. 15 to discuss the decision.

Gold is primarily sold worldwide using U.S. dollars, making the currency’s strengthening value a key factor in the commodity’s performance on the market. A strong dollar, the Wall Street Journal reports, makes gold more expensive in the global market and less likely to sell.

In terms of China’s stock market, a steep decline Friday may keep big investors from spending their money on gold. The Shanghai Composite Index ended with a 5.5 percent decrease, its biggest drop since August due to the announcement several major firms were under investigation, BBC reports.

By Marilyn Malara

UPI News