Traders in SPDR Gold Shares (NYSEArca: GLD) and other bullion-backed ETFs are keeping a close eye on the key $1,600 an ounce price level as well as a technical trend line that has provided support to the precious metal the past six years.

The pace of the 12-year bull market has increased over time but now gold is trading 15% below its September 2011 peak, according to

“Over the past 18 months … the price of one ounce of the yellow metal has declined more than at any point since 2008. In the end, this latest pullback has resulted in gold coming right back to support of its six-year accelerated uptrend channel,” it notes.

Gold prices have recovered somewhat this week on the crisis in Cyprus, the latest banking system to require a bailout in Europe. [Gold ETFs Rally as Cypriot Deposit Scheme Rattles Investors]

Bullion-backed ETFs saw record outflows last month but investor withdrawals have slowed recently.

“We believe that the ETF liquidation will stop,” said Standard Bank analyst Walter de Wet. [Gold Back Above $1,600 as ETF Selling Abates]

Yet in India, the world’s top gold consumer, bullion ETFs are shrinking for the first time since June, Bloomberg reports.

Investments in Indian gold ETFs are unlikely to recover in coming months as investors will look for appreciating assets, Lakshmi Iyer, head of fixed income and products at Kotak Mahindra Asset Management Co., told Bloomberg.

Full disclosure: Tom Lydon’s clients own GLD.

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