gold down 6 reason

Here are several factors that may have affected gold and silver prices to decline during September:

1. The CME raises the margin requirements for gold and silver contracts (see below);
2. The FOMC decision to implement a stimulus plan in which the Fed will purchase LT securities and sell ST securities until June 2012 (see below);
3. The strengthening of US dollar compared with the riskier currencies including Euro,Austrian Dollar, Canadian dollar during September especially during the second half of the month;
4. New hope that EU policymakers are taking actions to stabilize the financial communities;
5. Shifts in the sentiment of traders as traditional “safe haven” investments were traded down.

Here are several factors that may have affected gold price and silver price and curbed their downfall:

1. The debt crisis in Europe is still real and near and the speculation around Greece’s default on its debt, and Italy’s rating downgrade didn’t help ease the concerns of many investors.
2. The US labor report for August that showed no increase in U.S. employment;
3. The increase in gold holding by governments during September (see below);
4. The sharp falls in the U.S. stock market indexes mainly during the first half of September (see below);
5. The rapid falls in long term US Treasury bills yields mainly during the first half of the month (see below);
6. The moderate growth in the U.S. federal deficit during August 2011 by $134 billion as this conditions raised the level of uncertainty the market.

The sharp falls of gold and silver prices during September strengthened the relation between the two bullion prices as the correlation between the daily percent changes of gold and silver pricessharply inclined to 0.858 – the highest correlation level since March 2011.