NEW YORK (Scrap Register): Gold’s recent losses accelerated as the market fell below the 100-day moving average and there could be more downside in the near term as sentiment toward so-called risk assets improves, said Commerzbank.
Spot metal fell to $1,272.70 an ounce Tuesday, its weakest level of the year to date. It had since bounced to $1,276.05, but was still down 85 cents for the day.
“Yesterday’s price slide saw gold shed all of the gains it had accrued since the start of the year,” Commerzbank said. “We attribute the price fall yesterday to technical selling after the price dropped below the technically important 100-day moving average.”
There were further outflows from exchange-traded funds, the bank added. “We do not understand why the gold price should be weak given the very loose monetary policy pursued by many Western central banks – apparently the ECB [European Central Bank] is even considering price-level targeting. That said, we do see a further short-term downside risk for the gold price in the current market environment, which is characterized by extreme complacency among market participants and increased risk appetite,” Commerzbank noted.