The Gold Crash - We Dodged a Bullet

You must have heard of it by now. The Great Gold Crash of 2013. It might not be as dramatic as the  Boston Marathon Bombing but it is perhaps one of the most important developments in the commodity markets no seen since 30 years ago.

In case you missed the news, here is the gist of it:

The 2013 Gold price crash refers to the biggest drop in the value of gold over a two day period in over thirty years. The price crash began on Friday 12 April when five hundred tonnes of "paper" gold were sold. The price of gold continued to fall until 16 April and has been cited as evidence of market rigging. An alternative explanation is that the price has collapsed due to deflationary trends in the global economy.Investors have begun to doubt that quantitative easing will have an inflationary impact

The Great Gold Crash of 2013. Chart from Bloomberg

There are many theories and ideas as to why the value of gold crash, but no one really knows why. This interesting article sums up the whole list of reasons which includes conspiracy theories and political intrigue. gold-crashes-most-in-30-years-what-does-it-really-mean

We managed to dodge the gold crash bullet as our entire gold and resource allocations were switched out in March. UOB Gold and General Fund lost around 19% in a week while First State Global Resource lost around 9%. Meanwhile, the outlook of the financial markets continue to deteriorate as the mix economic news around the world are starting to drag the market down. We have not seen a substantial correction which we could take advantage of yet but the storm seems to be building.

I will touch a bit more on the Gold Crash in the coming month end commentary and what are some of the implications of the crash.