The next serious support is the $1321.50 print where the mid-April decline stopped. Through that and you're looking at the $1200 range. As the old-timers used to say, this market is broken more than the Ten Commandments.
From Resource Investor:
ETFs could sell another 250 tonnes of gold
Wholesale gold bullion prices fell to three week lows around $1,410 an ounce Wednesday, as European stock markets ticked higher, reversing earlier losses following disappointing Eurozone growth data.Earlier:
Gold in euros fell as low as €1,094 an ounce, while gold in Sterling fell below £930 an ounce.
"Gold spot is approaching the support [level] of $1,403 [an ounce]," say technical analysts at Societe Generale.
"There is no significant level of support between here and the low from April 16 in the $1,322 area," adds the latest technical analysis from Scotia Mocatta.
The world's biggest gold exchange traded fund SPDR Gold Trust (ticker: GLD) could lose up to a further four million ounces (almost 125 tonnes) to add to the nearly 300 tonnes it has lost through redemptions since the start of the year, according to analysts at Deutsche Bank.
"We expect that the bulk of the drawdown comes from institutional investors rather than retail investors," says a report from Deutsche. "If in fact only institutional selling is occurring in the gold ETF then we expect that nearly two-thirds of the selling that is likely has probably already passed. As SPDR is roughly half of total physically backed ETFs, this could imply a further 4 to 8 million ounces [approx. 125 to 250 tonnes] selling [from all gold ETFs] if macro fundamentals continue to move against gold."
"In the short term, gold prices remain caught between the recent slowdown in U.S. activity and the significant decline in ETF holdings," adds a note from Goldman Sachs, whose analysts have a 12-month gold forecast of $1,390 an ounce....MORE
As Indian Central Bank Restricts Gold Imports Spot Falls to a Three Week Low
Reserve Bank of India Launches Inflation Bonds to Reduce Demand for Gold
