Exchange traded funds backed by physical holdings of gold have been put through the ringer this year. Not only are the SPDR Gold Shares (NYSEArca: GLD) and the iShares Gold Trust (NYSEArca: IAU) both down 21.9% year-to-date, each are on the list of 10 worst offenders in terms of ETF outflows. GLD alone has seen outflows of almost $21 billion.

GLD, IAU and rival gold ETFs have climbed over the past three months, but with a bearish head-and-shoulders pattern potentially forming for gold futures, GLD and friends could be in for more pain. The head-and-shoulders pattern is formed when a security rises to a third peak, usually not as high as the second and proceeds to decline below prior support, also called the “neckline.” [Gold Miners ETFs Could Face Technical Pullback]

“The $1,300 level will be an important point in coming days to set the market direction,” said Hiroyuki Kikukawa of Nihon Unicom in an interview with Bloomberg. “Any move below the August level will confirm the downtrend toward this year’s low of $1,179.40 an ounce on June 28.

GLD, IAU and others got a modest boost last week in a delayed reaction to the government shutdown after an unexpected decline triggered by a technical sell-off around a psychological level. Gold’s safe-haven status increases during times of economic and geopolitical uncertainty, but that has not always been the case this year as investors have fretted about the end of bullion’s 12-year bull market. [Gold ETFs Pickup After Touching Two-Month Low]

Still, not all observers have a gloomy technical outlook for bullion. Gold futures may rebound to $1,425 an ounce in the fourth quarter after forming a double bottom, Bloomberg reported, citing Logic Advisors.

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