Saxo Bank's New Year outrageous prediction, that gold would hit $1,200 an ounce in 2013, has come true. Dramatically against market consensus of the time, Ole Hansen said in December that this was a likelihood and would be down in part to the Federal Reserve reducing or ceasing further purchases of mortgage and treasury bonds. Our Head of Commodity Strategy went on to say that central banks, especially in emerging markets, would take advantage of the lower price and that could be the catalyst for a price hike. Strong evidence of that is yet to come.

Nana Dahlerup, Saxo Bank's Senior Trader, says this is the largest drop since 1920 and that gold has fallen 25% this quarter. That's about $400 an ounce.