LONDON (Reuters) - Gold held steady in thin year-end trade on Tuesday, on course for its biggest annual decline in 32 years as prospects for global economic recovery prompted investors to switch to riskier assets.

After a 12-year bull run gold has shed around 28 percent in 2013, with the U.S. Federal Reserve's plan to step away from ultra-loose monetary policy undermining the investor case for holding bullion.

Years of accommodative monetary policies had propelled the price of gold to all-time highs of $1,920.30 an ounce in September 2011, as low interest rates encouraged investors to put money into non-interest-bearing assets.

"As soon as short-term interest rates start rising then you can't afford to invest in something that doesn't pay yield like gold - it's going to be equities and ... money market funds will also seem more attractive," Standard Bank analyst Walter de Wet said.

"In that sort of environment (of higher rates) the key is the yield and also the credit risk, which is substantially lower right now, and not really working in favour of gold demand."

Spot gold was up 0.1 percent at $1,197.66 an ounce at 1307 GMT, while U.S. gold futures for February delivery fell 0.6 percent to $1,197.40 an ounce.

snip-

Read more:http://ca.news.yahoo.com/precious-gold-t...-070100122.html

I'd be interested in reading what y'all think about this...

What will have more value when desperate times come a bag of rice or an ounce of gold

Quote: algernonpj wrote in post #7

---

'In theory' people buy gold when the economy is down as a safe way to preserve, not increase, their wealth. They sell when the economy is up and there other ways to invest and increase, not merely preserve, their wealth.

However it is my understanding that the gold market is not a free market but a manipulated one. It seems strange to me that the price is going down since the last I read, people all over the world were buying up gold.

So a few things could be going on. the price could be being manipulated down to add to the myth that the US and global economy are improving, or to lure some investment in the market from the middle class in anticipation of another wealth transfer when the market goes down and the middle class sells at a loss, or to lure some selling from the middle class to enable wealth transfer as they sell gold at a loss.

The short version is whatever is going on it's not for the benefit of the middle class of the US.

---