The August low of about $1,272 is a target, and a drop below that level would mean declines toward the $1,200 to $1,100 area would be possible, the bank said. Gold for immediate delivery traded at $1,314.48 an ounce by 6:18 a.m. in London, set for a 22 percent decline this year.

“We continue to believe that the medium-term downtrend remains intact and will do so while no daily chart close above the Sept. 19 high at $1,375 is being made,” Axel Rudolph, a technical analyst at Commerzbank in London, wrote in an Oct. 1 report. “Failure at $1,272 will confirm that gold has resumed its medium-term downtrend.”

Gold reached an eight-week low of $1,277.15 on Oct. 2 and Commerzbank holds its bearish outlook because the metal “hasn’t taken out any resistance of note,” Karen Jones, an analyst in London, said by phone on Oct. 4. Prices slumped this year after some investors lost faith in the metal as a store of value on speculation the U.S. Federal Reserve will slow stimulus as the economy strengthens.

In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.