NEW YORK — The price of gold, which has climbed for years like a blood pressure reading for anxious investors, plunged Wednesday to its lowest level in three months.
Gold fell almost $58 to $1,614 per ounce. It has declined 15 percent since September, when it hit a peak of $1,907. It had more than doubled since the financial crisis three years earlier.
Surprisingly, the fall came on an ugly day in the stock market — the Dow Jones industrial average lost 125 points. Last year, a day like Wednesday would have caused fearful investors to buy gold as a protective investment. “It’s difficult to forecast, but I think the gold bull market is over,” said Cetin Ciner, a professor of finance at the University of North Carolina-Wilmington. He likened the surge in gold to dot-com stocks before they collapsed.
Some investors buy gold as a hedge against inflation, and minutes from a Federal Reserve meeting that came out Tuesday afternoon suggested that the central bank believes inflation remains under control.
Gold’s attraction as an asset of refuge during crises also seems to have diminished. The economy has picked up, and worstcase scenarios in the United States and Europe have faded.
“Fear has been gold’s best friend, and so to the extent that fear is dissipating, gold should fall,” said Jim Paulsen, chief investment strategist at Wells Capital Management. “We might look back at these Fed minutes as the line in the sand.”
