Gold traders are divided on whether bullion will extend declines after the biggest plunge in three decades generated buying from investors and jewellers.
Fifteen analysts surveyed by Bloomberg expect prices to rise next week, 14 were bearish and a further five were neutral. Gold tumbled 13 per cent in the two sessions through April 15, the biggest drop in 33 years, on concern European governments would follow Cyprus in selling off reserves, while an unanticipated slowdown in Chinese growth sparked declines across commodities. In the past four days, bullion has rebounded about 3.7 per cent on the Comex in New York.
Asian buyers have stepped up bullion purchases since prices fell, with imports by India, the world's biggest consumer, expected to jump by 36 per cent through June compared with a year earlier, the Bombay Bullion Association Ltd. said. Australia's Perth Mint said April 17 that sales doubled from last week. Hedge funds have reduced bets on higher prices by 72 per cent since October while Goldman Sachs Group Inc and Societe Generale SA predicted declines.
Gold prices fell 16 per cent this year to $1,411.50 an ounce on Comex, after rallying for the past 12 consecutive years. Prices, which slid into a bear market on April 12, are down 27 per cent from a peak reached in September 2011.
Fifteen analysts surveyed by Bloomberg expect prices to rise next week, 14 were bearish and a further five were neutral. Gold tumbled 13 per cent in the two sessions through April 15, the biggest drop in 33 years, on concern European governments would follow Cyprus in selling off reserves, while an unanticipated slowdown in Chinese growth sparked declines across commodities. In the past four days, bullion has rebounded about 3.7 per cent on the Comex in New York.
Asian buyers have stepped up bullion purchases since prices fell, with imports by India, the world's biggest consumer, expected to jump by 36 per cent through June compared with a year earlier, the Bombay Bullion Association Ltd. said. Australia's Perth Mint said April 17 that sales doubled from last week. Hedge funds have reduced bets on higher prices by 72 per cent since October while Goldman Sachs Group Inc and Societe Generale SA predicted declines.
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"Clearly a lot of psychological damage has been done, as well as the practical damage of margin calls on leveraged positions and collateralised gold so we should not expect a recovery as quick as the decline," said Adrian Day, who manages about $160 million of assets as president of Adrian Day Asset Management in Annapolis, Maryland. "The drop seemed very overdone to me."
Gold prices fell 16 per cent this year to $1,411.50 an ounce on Comex, after rallying for the past 12 consecutive years. Prices, which slid into a bear market on April 12, are down 27 per cent from a peak reached in September 2011.