Ask an expert: What's pulling gold down?

MSN Money's Anthony Mirhaydari explains what's next for the precious metal.

By MSN Money Partner May 21, 2013 12:51PM
Gold prices gained more than 2.5% on Monday after a roller-coaster ride, snapping a seven-session slide that was the longest since the financial crisis. But Tuesday, gold (GLD) prices were down again.

In the video below, MSN Money's Anthony Mirhaydari explains why gold has fallen, what's next for the precious metal, and where to find the smart investments given gold's fading luster.

On April 15, gold suffered its biggest one-day decline since the 1980s. That sell-off came on top of a massive decline the previous session. The total losses of 13% left gold at the lowest closing level in more than two years.

Gold © Comstock Images JupiterimagesWhile the free-fall has since been arrested, gold was down in seven of the last eight sessions. The precious metal again touched its weakest price since April 16 at $1,338.95 on Monday before rebounding.

But Tuesday morning, with a firmer dollar and the possibility the Federal Reserve might begin to taper off its stimulus measures, gold prices resumed their fall.

Mirhaydari explains the reasons behind gold's weakness. For one, gold has always been regarded as a hedge against inflation as well as anything that could potentially have a negative global impact. But such risks have receded, and with the stock market doing so well, investors are looking for higher returns rather than safe havens.

Mirhaydari further speculates on the reasons behind gold's general slide, bringing up three interesting theories. He concludes with some advice for investors.

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May 21, 2013 3:26PM
Nothing here, glad I didnt pay for that non advice.
May 21, 2013 4:22PM
Just another flip of the cards. So now Tony is off of gold and back on the bonds. We will probably see gold go back up again.
May 21, 2013 5:19PM
Are there smart investments out there? Sure, there are. But gold isn't an 'investment', per se. It's a hedge against inflation. And given all the games that the world governments (particularly ours) are playing with their currencies, I firmly believe in keeping a certain percentage of gold in my investments.
May 21, 2013 4:03PM
Gold has had it's heyday for this decade.  Barring all out war with major countries, it will recede back to a new baseline like it did in the 80's probably never to heard from again for another decade or two.
May 21, 2013 5:43PM

HMMMM...Guess you should always have a little in precious metals in any well diversifed portfolio.

It helped us a lot just a few years ago.

May 21, 2013 4:28PM
I think I have about as much invested in gold as Warren Buffett, and for the same reasons. Does that put me in good company or what?
May 22, 2013 4:47AM
All I keep hearing is that there is plenty of demand for physical Gold. I also keep hearing that paper Gold is manipulating prices regardless of actual supply. At the end of the day, Global Feds gone Mad can only be good longer term for Gold prices. Gold has made a monster run. It's natural for a pullback at some point and it has. This will be no different for Stocks.
May 21, 2013 4:56PM
3  worthless predictions here's the 4th the stock market is receiving phenomenal success and nobody is hoarding  gold when they can be making substantial gains in the market like  the rats they are abandoning ship for safer shores or shall I say gains no one is willing to lose out on the markets record breaking gains
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