Gold is on its longest slump in sixth months after suffering its sixth successive day of declines yesterday.
The slump, which saw the yellow metal drop as low as $1,217.70 an ounce, means that gold has fallen a total of $60 an ounce in just one week – its longest run of unbroken losses since November last year.
At the heart of the decline appears to be ongoing speculation about a potential Federal Reserve rate hike.
However, speaking to Bloomberg
, Ole Hanson, who is the head of commodity strategy for Saxo Bank, commented that the long-term outlook for gold still favours an upside despite the current blip.
“While US interest-rate expectations are being adjusted higher and the dollar continues to recover, gold will be struggling,” he said.
“However low growth, negative sovereign-bond yields, the potential of inflation making a rare return and upcoming event risks make us view the current setback as a healthy correction within the established uptrend.”
In addition, the World Gold Council issued a trends report which showed that with investors stocking up on gold at the start of 2016 the yellow metal enjoyed its best ever first quarter in 2016 – and it’s highest ever for any quarter on record with the exception of one quarter in 2009. At the heart of the jump has been significant investment demand – which leapt by 122 per cent compared to the same quarter in 2015.