Gold

CONTRARIAN

Japanese investors have reacted with muted enthusiasm to a sweeping election victory by Shinzo Abe's Liberal Democratic Party.

Ben Bernanke, the chairman of the Federal Reserve, has said he does not understand gold prices or why investors hold it during certain economic environments.

Hedge fund manager John Paulson's gold fund has posted its third successive double-digit monthly loss and now stands down 65% this year, according to reports.

A tumultuous June may have taken the edge off many of the sizeable gains made by funds in the first half of 2013, but it was not enough to derail performance completely.

The price of gold has continued its decline, falling below the $1,200 mark on Thursday for the first time since August 2010.

The gold spot price hit a 33-month low today after positive US economic data strengthened the case for a tapering of quantitative easing, further eroding demand for safe havens.

Gold is likely to suffer from further sell-offs in the short to medium term as investors remain focused on an end to quantitative easing, Steve Russell, investment director at Ruffer, has said.

Nitesh Shah, research analyst at ETF Securities, says while the price of gold has dipped recently, other precious metals could provide investors with a good return as economic conditions improve.

Many UK-listed stocks have got off to a flying start in 2013, with indices approaching all-time highs, but some companies have been given a rough ride by markets, destroying shareholders' capital in the process.