Businessman George Soros is blaming the euro crisis in 2012 for making gold an unsafe haven for investors. Since October, gold prices had been on a downtrend and last week the yellow metal for June delivery, the most actively traded contract, hit a nine-month low of $1,553.50 a troy ounce on the Comex division of the New York Mercantile Exchange.
REUTERS Gold is seen by investors as a hedge against inflation and currency devaluation.
He explained to the decline of gold as storage of value to people selling their gold when the euro crisis hit the bloc in 2012.
"So gold went down together with everything else ... Gold was destroyed as a safe haven, proved to be unsafe. Because of the disappointment, most people are reducing their holdings of gold," The South China Morning Post quoted Mr Soros.
However, he said central banks will continue to purchase the yellow metal, so people should not expect gold prices to dip drastically. He said a looming crisis would cause gold prices to move up or down, making gold prices very volatile reckoned on a daily basis, but lacks trend on a longer-term basis.
Besides the euro crisis, gold experts attribute the dampened price to a record-breaking rally in U.S. equities that lured investors toward riskier assets and away from precious metals.