Salient to Investors:
Gold dropped 23 percent this quarter, heading for its biggest loss since at least 1920 in London.
A lack of accelerating inflation and mounting concern about the strength of the global economy is hurting silver, platinum and palladium, which are used more in industry than gold.
Bart Melek at TD Securities said the selloff is a continuation of the response to concerns over Fed tapering, and we need to see more physical buying and demand from central banks before it really turns around – no one wants to catch a falling knife.
Analysts from Morgan Stanley to Credit Suisse and Goldman Sachs trimmed gold forecasts this week.
Commerzbank said better-than-expected US data makes it more likely that the Fed will prematurely taper.
Gold’s 14-day RSI was below the level that indicates a rebound may be imminent.
The SPDR Gold Trust assets are the lowest since February 2009, while EurekaHedge said the number of hedge funds investing in gold fell to the lowest since 2010.
David Lennox at Fat Prophets said the raft of US data all pointed to stronger growth, which pushed the dollar higher – a stronger US dollar and tapering QE are 2 nails in the coffin for gold.
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