In the price of gold fell sharply in the past week may have on the global economy a big red flag.
Some of the top investors said the sell-off of gold, and the broader oil and metals prices, to reflect create a strong demand, even if they are pouring money into the world financial system, the Fed and other central banks failed.
Slides, the biggest one-day drop (Monday) always in dollar terms gold investors uneasy, who saw nipped in the days of billions of dollars in revenue, which may presage future prices of other assets. Stock price decline may have started a few days this week.
Some people think the move in gold as a possible flash point for a wider range of economic and market impact of the collapse of the hedge fund Long Term Capital Management in 1998, and even after the financial crisis in decades comparable. Both events before the sharp decline in gold.
Gold and commodity weakness is "signaling concerns about global economic growth, said:" Mohamed El-Erian, Pacific Investment Management Company, co-chief investment officer, responsible for overseeing the $ 2 trillion in assets. Commodity send the signal of economic growth for some time, now louder. "
Stampede gold earlier this week, a bad auction, investors on Thursday to sell its holdings of U.S. Treasury Inflation Protected Securities. This debt is seen as a way to prevent any increase in the rate of inflation of an active economy, it may become a reality.
The price of gold run in the post-crisis result in part of the speculation caused by aggressive monetary policy created a lot of cash. People used to think, a lot of credit to support the creation of the world economy "re-inflation" - but that this may just be gold, oil and copper - two assets after the recent pullback in close connection with the global industrial growth - should not have happened.
The recent influx of United States Treasury security - push up yields close to four-month low - is another sign that the global economy is far from the buzz. The national debt is often seen as a refuge when the economy is weak or unstable.
PIMCO Total Return Fund (PMBIX.O), $ 28.9 billion of assets held by Bill Gross and supervision, increase their exposure to government bonds and government debt securities from 33% in March to 28% in the previous month. Building on Wednesday said on Twitter, "Gold has begun a leveraged market sell-off." Buy U.S. Treasury bonds. "
Some people even talking about may be to the United States the possibility of a relapse into recession, although this is a minority view.
Komal Sri Lanka Kumar, president, global strategic Sri Lanka Kumar and TCW Asset Allocation Strategy Fund's portfolio manager, said: "This is not noise. Fundamental consequences,".
International Monetary Fund (IMF) call on Tuesday its forecast for 2013 to 3.3% from 3.5% earlier forecast for global economic growth. This is little changed from 3.2% in 2012.
Concerns about slowing economic growth the Fed internal resonance. Several Fed officials expressed concern about deflation, including a more centrist Brad (James Bullard), St. Louis Fed president, who on Wednesday said that "if inflation continues to go on, I would be willing to increase the pace of stimulus.
"The stars line up a significant dip in the second half of this year, U.S. economic growth, and may even double-dip recession, in 2014, Sri Lanka Kumar said.
It all pumped into the world economy, raised questions about the effectiveness of the Bank of Japan, the Federal Reserve and other major central banks huge cash stimulus.
With government funding constraints, the central bank has taken a lot of the burden, the damage caused by the impact of the financial crisis, the world economy back on the growth track. If these measures, such as a large number of Fed purchases of government and mortgage debt began diminishing returns, it could be a huge concern for investors of any high-risk assets.
Gold loses SHINE
Downdraft in the price of gold coincided with the growing body of evidence indicates that the slowdown in price increases. On Tuesday, the U.S. Department of Labor announced that in the past 12 months, U.S. consumer prices rose by 1.5%, the slowest rate of growth since July 2012.
Bank of America Merrill Lynch recently warned that gold - $ 13.92 - trading before stabilizing late Thursday, may fall to $ 1,200 on the grounds that "anti-inflation concerns, coupled with the news of the potential central bank gold sales .
Knock investors to sell gold, coupled with weak economic data, long-term inflation expectations in the lowest level since last summer.
10-year Treasury inflation-protected securities and the yield gap between 10-year Treasury notes on a regular basis - a measure of investors' outlook for inflation - 2.27 percentage points, on Thursday, the lowest since early September before the Fed announced the third round of large-scale bond purchases, known as QE3.
The 10-year inflation "break-even" speed, the Fed monitors, up 2.61 points, in late January.
At the same time, three-month copper futures fell by 12%, this year, the London Metal Exchange since October 2011, the first time fell below $ 7,000 a tonne. An important barometer of the importance of needs - from cars to plumbing - copper as used in industrial and housing.
However, some people believe that the dramatic wind serious inflation, the assets in the past decade is still incomplete - the decline of gold and other metals less disturbing.
"Because the global economy is a drawback of the global credit bubble, it seems unreasonable to expect the abnormal inflation, said:" a long-time strategist Richard Bernstein, who is responsible for his own namesake investment advisory firm in New York .
In addition, the gold can be said is in line with the amendment. Its prices have been rising for 12 consecutive years, has risen 52% in the past three years, the kind seen in the late 1990s, especially in technology stocks gain.
McDonald's, "said Jim:" Even at these levels, gold is still not attractive odds conducive to the end of the bull market, chief investment strategist at Chicago-based Northern Trust Global Investments, told customers to stop position is assigned at the beginning of March gold.
As the inflation outlook has weakened, investors have cut gold exposure.
Precious metals investment fund suffered a record outflow of 270 million yuan a week, the week ended April 17, according to Thomson Reuters Lipper, units, of which $ 2.2 billion from the SPDRs Gold Shares ETF (GLD.P) . GLD 50.8 billion dollars in assets one of the biggest exchange-traded fund, but it has seen its assets reduced by one third since October 2012, Lipper said.
The stampede out of gold gradually reduced, and pull back to more than 5% from a two-year low, a hit earlier this week, $ 1,321 per ounce, leading to some hope that the decline is in urgent need of correction results in a metal .
However, investors are very worried about another crash.
"If we see this again liquidation, the equity markets attendant and then we'll have a real problem," said Frank, small Cholly, senior commodities broker RJ O'Brien and Associates in Chicago.
 



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