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Gold Price Plummeting

The price of gold has been falling, as investors apparently think that global economic trends make the precious metal less attractive as an investment.

Gold dropped below $1,400 an ounce Monday, well below the all-time high of more than $1,900 recorded in August 2011. At the time, some analysts predicted the price would soon top $2,000.

In recent days, the price has dipped sharply, down 5 percent Friday, and another 8 percent Monday.

Gold is often bought as a hedge against inflation and a protection of wealth. Now, analysts cite several reasons for the plunging price. Among them are recent record highs posted by key U.S. stock indexes, as investors look for quick trading gains, and reduced fears about inflation in the U.S., where the world's largest economy is slowly improving.

At the same time, investors also worried that Cyprus' announced intention to sell more than $500 million of its gold reserves to help resolve its debt crisis could spur other European countries to sell gold stocks as well, flooding the market. One leading financial adviser, Goldman Sachs, said investors should sell their gold holdings.

The prices for silver, platinum and palladium have also tumbled in recent days.

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