Global sentiment against gold, which has fallen a whopping 31 percent from its top, is so bleak that even elderly Chinese ladies no longer have a positive view of it, according to
USA Today.
Gold usually goes up when investors sense danger. But despite the crisis in the Ukraine, the lack of economic clarity as the Federal Reserve removes the safety net of its unprecedented monetary stimulus, and the usual tinderboxes from the Middle East to North Korea, gold has been a dud of late.
From its high-water mark of $1,895 per ounce in 2011, gold was priced at about $1,307 per ounce in Wednesday morning trade.
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USA Today reported many analysts are not overly optimistic from here.
UBS trimmed its one-month forecast to $1,250 per ounce from $1,280, and its three-month forecast is down to $1,300 per ounce from $1,350.
Bank of America Merrill Lynch advised selling if gold hit $1,300.
Metals Focus predicted prices of the precious metal could slump to $1,100 per ounce with a growing U.S. economic recovery.
MarketWatch columnist Mark Hulbert, who follows gold market timers, said his gold sentiment indicator is at negative 16.7, which he interpreted as “moderately bearish.”
China Daily said that even Chinese dama – translated as “aunties” – are withholding their traditional fervor for gold.
“The exhilarating scenes of Chinese dama buying out all the gold in every jewelry store has gone sour with the gold price continuing to fall since the second half of last year,” China Daily reported.
MacNeil Curry, head of global technical strategy at Bank of America Merrill Lynch, is solidly in the gold bear camp. He told
CNBC that gold is headed for a drop of about 9 percent, according to his calculations.
Based on his macro view, Curry said, "The intermarket picture has become more negative for gold. Specifically we've seen a breakout in the equity market, specifically the S&P 500, which suggests that investors are becoming less concerned about what's going on in Ukraine, and investors are becoming more confident about global growth, at least in the short term. And furthermore, you've seen also seen the dollar start to reverse on the topside."
"When you put that together in conjunction with the price action, all that says that the risk-
reward is for gold to resume that downtrend that began in mid-March," Curry said.
Barron’s reported that the SPDR Gold Trust, the largest bullion-backed exchange-traded fund, has been forced to shed nearly 18 tons of gold year-to-date on account of investor redemptions. In dollar terms, that amounts to $667 million, as investors vote with their feet.
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