Gold Bears Revived as Rout Resumes After Coin Rush

Gold bears are dominant again after prices resumed their slump and billionaire George Soros joined investors selling holdings in exchange-traded products that have retreated to a two-year low.

Seventeen analysts surveyed by Bloomberg expect prices to fall next week, with eight bullish and three neutral, the highest proportion of bears in two weeks. The analysts were divided a week ago after gold rebounded as much as 13 percent from the two-year low of $1,321.95 an ounce on April 16. ETP holdings slid 16 percent to 2,207.1 metric tons this year, the lowest since July 2011, data compiled by Bloomberg show.

Prices that rallied as much as sevenfold in the past 12 years entered a bear market last month after some investors lost faith in gold as a store of value and equities rallied on mounting confidence the U.S. economy is improving. The slump spurred a surge in demand around the world, with coin purchases from the U.S. Mint rising to a three-year high in April. This month’s sales are on course to be 65 percent lower and global ETP holdings increased on just one day in the past six weeks.

“The momentum has slowed significantly,” said Jeremy Baker, a senior commodities strategist who oversees about $800 million of assets at Harcourt Investment Consulting AG in Zurich and who forecasts prices may drop as low as $1,200 in six months. “The safe haven has definitely lost its gleam. We are in a declining phase here.”


Dean Popplewell, Director of Currency Analysis and Research @ OANDA MarketPulseFX

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell