http://www.ft.com/intl/cms/s/0/e373deb4-a37e-11e2-ac00-00144feabdc0.html#axzz2QKMK22JH

Gold plunged to a 21-month low on Friday as traders placed bearish bets after a recommendation by Goldman Sachs while worries about selling by Cyprus also depressed prices.

The yellow metal fell as much as 4.3 per cent on the day, hitting a low of $1,493.35 a troy ounce, the weakest level since July 2011.

“Gold is looking sick at the moment,” said Ross Norman of Sharps Pixley, a gold bullion dealership.

Gold prices have been weak since the start of the year because of selling linked to exchange traded funds.

The yellow metal declined almost 5 per cent on the week, the largest fall since March last year, hit by guidance from Goldman Sachs.

The Wall Street bank lowered its gold price forecasts and recommended clients initiate a “short” position, a bearish bet.

Publishing year-end targets of $1,450 a troy ounce in 2013 and $1,270 in 2014, the bank said: “We see risks to current prices as skewed to the downside as we move through 2013,” adding that “the fall in prices could end up being faster and larger than our forecast”.

The bank cited expected US growth later this year as one of the factors affecting the gold price.

The accelerations of forecasted economic growth to “above-trend pace will support US real rates”, weighing on the gold market.

Meanwhile, uncertainty surrounding possible gold sales by Cyprus to help finance its €13.5bn contribution to a €23.5bn bailout package also continued to unnerve investors.

A draft bailout document obtained by the Financial Times said: “The Cypriot authorities have committed to sell the excess amount of gold reserves owned by the Republic” in a sale expected to generate €400m of extra state revenue through “an extraordinary payout of central bank profits”.

Sales volumes are expected by analysts to be about 10 tonnes but the initial announcement raised fears that other eurozone countries may look to sell their gold reserves in order to shore up their finances.

Italy holds 2,451 tonnes of gold, more than 70 per cent of its total reserves, while Portugal’s comparative figure of 383 tonnes accounts for 90 per cent.

However, comments by the Cypriot central bank after the details of the bailout package and the gold sale were leaked seemed to widen further an existing rift between the central bank and the Nicosia government.

There are legal hurdles that the Cypriot government needs to overcome to dispose of the gold due to rules governing the central bank’s independence, said analysts.

Other precious metals were also weak with silver losing 5.7 per cent to $26.05 a troy ounce while oil prices were hit by fears of lower demand, with ICE May Brent falling more than 3 per cent to $101.09 a barrel.

At the time of this posting it is down -5.03%, that´s the biggest one day price movement I´ve ever seen it make.