November brought more bad news for believers in the eternal power of gold: the commodity（商品） saw its sharpest monthly price fall since June. This month's 6% drop makes 2013 a terrible year for gold, and is set to mark the end of a 13-year boom. Gold is heading for its first annual fall since 2000 after shedding a quarter of its value this year.

 

Things were so different in September 2011, when it hit a record price of $1,921 an ounce, a gain of more than 550% in just over a decade. Investors¹ had piled in during the financial crisis: the price of gold traditionally rises when assets such as shares, bonds and cash are threatened.

 

Gold maintained its allure² as central banks pumped money into their economies, raising fears of runaway³ inflation. But then the easing of fears for the eurozone, and signs of economic recovery in the US and other economies, steadied nerves.

 

There were few starker⁴ signs of the reversal of gold's fortunes than the news that Britain's second-biggest pawnbroker⁵ was melting down stock to raise money. Last week Albemarle & Bond admitted it was smelting⁶ jewellery to sell for quick cash in order to stay within its lending limits. As recently as 2011 the company went on a gold-fuelled expansion spree and declared "the age of the pawnbroker（当铺老板）".

 

More famous players have also been caught out. The gold fund of John Paulson, the hedge fund manager who made billions betting against the US housing market, is down 63% this year.

 

The key to the fall is the improving US economy and the response of the Federal Reserve. Gold's troubles began when the Fed said it would ease off its bond purchase programme amid encouraging news on jobs and growth.

 

With less need to keep money tied up in gold, which pays no interest or dividend⁷, the markets turned "risk-on": investors scrambled⁸ for new shares in Royal Mail and other flotations, and US shares are at all-time highs.

 

Georgette Boele at Dutch bank ABN Amro said: "The gold bubble has burst and ... more of gold's previous supportive drivers are about to push the precious metal much lower. As such we expect additional large sell-offs."

 

In India, traditionally the world's biggest consumer of gold, the government has imposed punishing duty on gold purchases which has led to mass recycling of some of the 20,000 tonnes of gold stashed⁹ in Indian homes.

 

Consumers in China have been buying gold as they become more affluent¹⁰. But Boele predicts that despite this, it will fall to $1,000 an ounce next year and $800 in 2015.

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