(Kitco News) -Although negative sentiment in the gold market is at historic highs, some analysts suggest that prices could continue to push lower and possibly below $1,200 an ounce in the near term as the market lacks a catalyst to reverse the current trend.
While gold is off its recent one-year low, the market is still preparing to end its fourth straight week in negative territory. Gold has closed lower seven out of the last eight weeks. December gold futures last traded at $1,224.40 an ounce, down 0.67% for the week.
“The rate at which gold is falling is slowing but the market is still in a classic downtrend,” said David Madden, market analyst at CMC Markets.But it’s not all doom and gloom for the precious metals market. Silver has nearly stopped its seven-week downtrend as prices prepare to end the week with slight positive gains. September silver futures last traded at $15.49 an ounce, relatively unchanged on the week.
Turning back to gold, Madden added that in the current environment, he expects prices to continue a “slow burn” lower and said they could eventually push below $1,200 an ounce.
“I don’t think we are going to see a major sell-off in gold, but we could see prices eventually push to important support at $1,180,” he said. Madden added that it is difficult to be bullish on gold in the near term as the U.S. dollar and equity markets continue to dominate investor interest.
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