The SPDR Gold Shares (NYSEArca: GLD) was mostly steady yesterday, but the world’s largest bullion-backed exchange traded fund is still off 1.6% over the past month and most traders believe there is little reason to believe gold is going to rebound in the near-term.
Bearish forecasts continue mounting against the yellow metal, confirming that gold is still in a lengthy bear market, giving some traders pause about how much more near-term upside the yellow metal has in store. [Doubters in Gold Rally]
Gold has been in a 2-year bear market, which has seen failed rallies on the back of various news events. Continued strength in the US economy and labor market has offset political and economic events since the Gold market turned bearish in 2013.
“At least two brokerages, ABN Amro and National Australia Bank, have said in the last week gold will drop to $1,000 in the coming months. Goldman Sachs said in November it expected gold to hit $1,000 in twelve months,” reports Reuters. “Put option positions tied to the $1,000 strike price for the most active February COMEX gold futures have jumped over 200 percent from the beginning of November to 6,950 lots as of Dec. 7.”
Gold demand has also been wilting thanks to tepid buying in India and China’s inability to pickup the slack. China and India are the world’s two largest gold consumers. According to the World Gold Council, India imported 891.5 tons of gold last year while demand was 811.1 metric tons. The council believes consumption will increase to between 900 tons and 1,000 tons this year. [India Unlikely to Stem Gold’s Decline]