Source: Financial Times                        Date: 31 August, 2011

After two weeks of rallying, gold fell lower than it has in over three decades to USD 1,911.46 per ounce last week. Gold is a major commodity in Mongolia and last week Ivanhoe mines considered adjusting operations to focus more on gold excavation reporting copper at a loss due to gold's rise in value.

Spot gold prices fell by 3.4 percent to USD 1,750.55; down USD 160.91 from 1,911.46. Rising equity and expectations that U.S. Federal Reserve President Ben Bernanke would discourage investors from running to precious metals may have contributed to the drop. Investors in the Shanghai Gold exchange sold their precious metals after two spikes in their value this month. On Wednesday, the operator of New York's Comex exchange said it would increase the market's gold margin requirements by 27 percent. Fears emerged that gold traders using borrowed money would need a bail out.

Yet, experts are not ready to call gold out yet. Past corrections in spot prices for gold were only short-term.

“If you look at the long-term price, there have been similar corrections and it has continued going up,” Matthew Turner, precious metals strategist at Mitsubishi said. He acknowledged that last week’s rally, when gold rose 6 per cent, was “excessive.”

In spite of the correction, investors noted that gold remains the second best-performing commodity so far this year, up 24.6 percent since January. Silver is the best-performing commodity, up nearly 30 percent since the beginning of the year. Gold's value is still far below its peak in 1980 when it reached USD 2,400 per ounce in 1980 after the Soviet invasion of Afghanistan.