Gold Prices Crashing to Two-Year Low; Investors Flipping Out, Exec Says "Panic Is Everywhere"

Yesterday, Monday, April 15, gold prices fell to their lowest point in two years, rocking already-unstable international markets. The price fell below $1,400 an ounce-tanking from over $1,600 just 10 days ago.

The Associated Press wrote that that "there is talk in the markets that a number of institutions are cashing in following a reduction in gold price predictions from leading investment banks, including Goldman Sachs."

The decline was sparked by slowing growth in China and a weaker-than-expected report regarding their industrial production. Gold is often viewed as a safe store of value in periods of high inflation and is the most active futures contract. Other metals, including silver and oil, also took a tumble. Mining stocks also fell.

Some have rumored that Merill Lynch orchestrated the quick, massive sale that lowered price below the previous bottom-level of the ongoing bull run dating to 2000. A second massive influx occurred when another 10 million ounces hit the trading floor to be sold over thirty minutes. The sale was clearly no accident, but a display of "shock and awe", timed for impact when the New York market is most liquid and other markets, such as London, were open and able to be affected.

Opinions on the impact of the freefall are mixed. While it is giving many investors pause - or absolute panic - other markets, including the US dollar, don't seem to be terribly effected. Some bankers feel investing in gold is a rejection of government money and finance. Buisness Insider's Joe Weisenthal said it represents a belief that "rocks (however shiny they are) are a better place to invest than human endeavors (like stocks)," so the decline may actually be a show of faith.

Investors have been snubbing gold in favor of stocks funds recently, as equity markets have gone on a run that's broken records.

Carsten Firsch, senior commodity analyst at Commerzbank AG, said "It's a slaughter. It all comes via the futures market. On Friday, more than 1,100 tons of paper gold had been traded. That is more than annual gold demand from China or India. I can't see a fundamental reason for this, to be honest."

Reports claim Cyprus may sell 400 million euros worth of gold added to the plunge; investors fear other European banks may do the same.

"Panic is everywhere. I've never seen anything like it," another exec told the AP.