Gold exchange traded funds reversed early losses Wednesday following a three-day down streak. The precious metal ETFs are testing the recent low from December 2011, a key technical level.

SPDR Gold Shares (NYSEArca: GLD) has slipped 4% over the past week and has been trending lower for about three months.

Gold is down about 20% from the recent high, which some analysts define as a bear market, reports Brendan Conway at Barron’s.

“From a charts perspective, gold is thus trading in the region of its September and December lows, which are seen as important support levels. If the price were to fall for any length of time below these thresholds, the psychologically important $1,500 mark would come within reach,” said Commerzbank’s commodity strategist Eugen Weinberg in the Barron’s post.

“Because gold ETFs are still recording no significant outflows, speculative financial investors must be largely responsible for the price slide. The ‘shaky hands’ will thus continue to be shaken out of the market, and the process of market adjustment will continue,” he added. “Once this process comes to an end, gold should be able to launch a recovery from a solid basis.”

Gold ETFs recently fell into the red for 2012, but investors in bullion-backed exchange traded products haven’t been shaken by the metal’s recent slide.

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