LONDON (SHARECAST) - Over the past few months a number of commentators have pressed the case for Gold as a safe haven for investors amidst the turmoil of equity markets globally. Whilst not disagreeing with this assessment in the very long term in all that time we have pretty much gone one way since the heady days in March this year when we briefly traded at $1000.
In amongst this stock market turmoil Gold has fluctuated wildly but has thus far given no indication that it is comfortable at levels anywhere above $900 an ounce. If anything, Gold has started to look increasingly soft on the downside with new lows of $720.25 overnight.
On the charts there is potential for Gold to decline further to levels last seen in the middle of 2007 around $685.00. In the interim there does appear to be minor support around $720, however a break here could see a decline to around $680-$690 where we could find further support.
Using Platinum as a comparison this metal has usually led declines in the metal prices over the past few months, and currently there is no evidence that this commodity is looking to bounce any time soon. Based on the premise that the trend is your friend it is currently trading well below its 3 year lows well in advance of the yellow metal.
On this basis the perception can be drawn that Gold has further to fall in the short term, especially when looking at both the GSCI (Goldman Sachs Commodity Index) and the CRB Index both of which look increasingly heavy as well with the CRB breaking below its 2 year lows.
