SPDR Gold Shares (NYSEArca: GLD) was down more than 3% on Friday to its lowest price level since 2011 as the precious metal was on track for its third straight weekly decline.
GLD saw its heaviest trading volume in over a year.
Gold has been caught in a downtrend since October 2012 and bullish sentiment is falling on signs the global economy is improving and lower safe-haven demand. A rebound in the U.S. dollar this year has also been a headwind.
Now, technical analysts say the metal could sell off more if prices fall through a key support line that has been in place for over a year.
GLD has seen net outflows of $8.6 billion this year to lead all ETFs, according to IndexUniverse data. [Gold Falls Amid ‘Steady, Large’ Outflows from Bullion ETFs]
Bullion holdings in the gold ETF reached 1,181.4 metric tons yesterday, the lowest in almost three years, Bloomberg reports.
“All of the traditionally supportive reasons for buying gold don’t seem to work right now,” Frank Cholly, a senior commodity broker at RJO Futures, told Bloomberg. “The argument for gold as a safe haven or protection against inflation just isn’t there. We have a risk-on market, with a lot of money pouring into equities. It doesn’t look too good for gold.”
GLD is down about 14% the past six months.
SPDR Gold Shares
Full disclosure: Tom Lydon’s clients own GLD.