Hallowed gold haven succumbs to sell-off - FT.com

From the FT, the important stuff is at the end of the article - after they talk down the barbarous relic...

Traders point out that this is not the first time gold has fallen at the peak of a crisis. At the height of the financial crisis in 2008, gold struggled for direction. From March 17, the day after the Bear Stearns collapse, to a low in mid-October, the bullion fell more than 30 per cent. In the next year, it surged 50 per cent.

Likewise, when the Dubai World default triggered a wave of selling across global financial markets in November 2009, gold dropped 12 per cent in the subsequent 10 weeks, only to rally to fresh records.

Indeed, there were signs on Monday that some traders were attempting to pick a bottom. By mid-afternoon in London, bullion had rallied more than 5 per cent from its low of the day to trade at $1,612.

Investors in gold through exchange-traded funds, which now hold more gold than most central banks, have also stuck with the metal. The holdings of the largest, the SPDR Gold Shares, remained flat at 1,252 tonnes throughout the whole of last week.

Crucially for traders who watch technical models, the yellow metal managed on Monday to stay above $1,525, its 200-day moving average, a level that has not been breached since January 2009. A fall below that level could indicate a sustained drop in prices, traders say.

see the whole story here:: Hallowed gold haven succumbs to sell-off - FT.com

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