Analyst Actions: Goldman Sachs Still Short Gold
From a technical perspective, gold prices fell to the key technical support level of $1530/toz. At $1434/toz, gold breached its the 200-week moving average sparking the largest single day decline yesterday.
According to Goldman Sachs ( GS ), "the sharp sell-off in gold was triggered by growing fears that the central bank of Cyprus would sell its gold reserves, potentially reflecting a larger monetization of gold reserves across other European central banks."
GS is maintaining its short, even though gold is now below its original $1450/toz target. Recall that GS noted last week that the decline in gold could be faster than analysts had initially expected. Furthermore, ETF holdings continue to liquidate, which points to a broader sell-off extending beyond the futures markets implying more downside from current levels.
In the pre-market, gold is trading up $40/toz to $1389/toz.