Data show that the Gold index equity funds (ETFs) gold holdings fell by more than 14 metric tons on the 1st, the largest decline in three months, and has been reduced for 11 consecutive trading days, and touched the lowest in July last year, reflecting the loss of support for gold. UBS Group is also bearish gold prices after the market, predicted that by the end of the year will fall below the $1,700 mark.
New York gold spot 3 day session fell 0.9% to $1,722.74 per tael, if the decline maintained until the closing bell, equal to seven days to have six days to close in the black. New York gold futures fell more than 1% in early trading in New York at $1,710.3 per tael.
As gold prices in New York hit their biggest monthly decline in four years in February, accelerating declines in gold ETFs will only put heavier pressure on gold prices. Gold prices, which surged to record highs last year, have fallen more than 8% this year, mainly because the economic outlook has turned positive, thus reducing demand for safe-haven assets.
As traders began to believe that the U.S. Federal Reserve (Fed) will raise interest rates ahead of schedule and sell bonds, so that bond yield climbed, which in turn accelerated the pace of the decline in international gold prices. fed policy officials will release more views on the economic outlook this week, as well as explain the way to respond to the recent bond market turmoil.
Analysts at TD Securities (TD), led by Melek, said, “Gold’s position remains precarious as the gap with real interest rates is set to narrow further.”
UBS Global Wealth Management believes that international gold prices are expected to fall further as these recent negative factors will intensify in the second half of this year. The department also predicts that the gold price will slide to $1,700 per tael by the end of September, and may fall to $1,650 by the end of December and around the end of March next year.
The department maintains a “neutral” rating on gold based on a diversified asset allocation stance, but recommends a position adjustment in case gold prices fall further in the second half of the year.
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