View the article online at http://citywire.co.uk/money/article/a660296
Death Cross! Investors fret over gloomy gold indicator
The gold price has fallen sharply, with chartists spotting a 'death cross'.
Gold has crashed into a death cross – an ultra bearish sign watched by market chartists.
On Tuesday, the precious metal's 50-day moving average was set to break below its 200-day average, and according to analysts at Sharps Pixley, bullion has since rolled over.
With the spot price at $1,589 shortly after 2.30pm, gold's latest retreat marks a 0.94% drop on the previous day's trade.
In some respects, gold's weakness comes as little surprise given that prospects for the global economy are looking up and inflation fears are dying away. Gold is seen as a traditional hedge for inflation.
A 'death cross' often heralds further sharp falls for the gold price, but some investors are not convinced that gold's strong run is dead.
HSBC told its clients the metal's bull market remains 'intact', while exchange traded product (ETP) investors have been setting the stage for a bullion recovery.
According to Sharps Pixley, ETP investors last week beefed up their gold-backed ETP holdings to 2,602.3 tonnes, around 1% shy of last December's peak.
But in contrast, hedge funds have been trimming their commodity bets. The net long combined gold speculators' positions calculated by Bloomberg have dropped 11% week on week, with the latest fall taking them to a six-month low of 128,581 contracts.
News sponsored by:
Making the most out of Europe's potential means seeing things differently. Learn more about how BlackRock's focused approach to investing in Europe helps investors unlock the continent's vast potential.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add firstname.lastname@example.org to your safe senders list so we don't get junked.