Central banks lose 560 billion dollars from gold price decline

Investors are rapidly fleeing the mutual funds that invest in gold, turning to shares, a trend that exacerbates the fall in the price of the precious metal, which has already led to a loss of 560 billion dollars of central bank reserves.

The exchange traded products linked to gold fell by 37.2 billion dollars in 2013, and yesterday the metal fell to the low rates of the past two years. The net outflow of gold ETFs this year reached 11.2 billion dollars (at the highest level since 2011), while U.S. and international equity funds had net inflows of 21.25 billion dollars, according to EPFR Global.

The central banks are among the biggest losers, as they hold 31,694.8 metric tons, 19% of all mined gold. After the ongoing 12-year rally, the metal dropped to 29% against the value it had in September 2011, namely 1,923.70 dollars an ounce. According to Bloomberg data, developing economies and corporate earnings, coupled with a slowdown in inflation, resulted in the rise of the value of the shares at 2.28 trillion dollars in 2013, but at the expense of traditional investment shelters, in this case of gold.