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According to a Bloomberg survey, 17 out of 26 market analysts predict a bearish trend for the gold with 8 expecting a bullish market and 3 are neutral. After news came out yesterday that George Soros, billionaire investor, joined BlackRock Inc. and Northern Trust Corp. in cutting his holdings in gold backed ETPs on March 31, gold plunged further after rebounding 13% from the two-year low of $1 321, 95 on April 16. As investors lost faith in gold as a safe haven for preserving wealth, leading to the biggest ever drop on April 15., attractive low prices spurred an increased demand.

Coin purchases from the U.S. Mint reached a three-year high in April. They were especially high in India and China. The Asian nation more than doubled the five-year quarterly average, based on discouragement in the weak domestic stock market. The U.S. Mint said April 23 it ran out of its smallest gold coins. This of course caused gold to rally, followed by a decrease in demand. Still, the net global demand decreased, since India and Chinas interest was outweighed by record ETP sales.

This months sales will be around 65% lower and global ETP holdings surged on just one day in the past six weeks. Jeremy Baker, a senior commodities strategist at Harcourt Investment Consulting AG in Zurich forecasts prices may drop as down to $1 200 in six months. He said: “The momentum has slowed significantly. The safe haven has definitely lost its gleam. We are in a declining phase here.” Gold is the second worst performer this year in the S&P GSCI gauge after silver. Investors are currently attracted by the very strong performance of the U.S. stock market based on confidence that the U.S. economy will improve.

Predictions are also supported by an investor poll done by Credit Suisse Group AG. e-mailed to Bloomberg. Sixty percent of the investors think gold has the worst outlook for the following months, while 18% selected copper and 16% – corn. Kamai Naqvi, head of commodities sales in Europe, Middle East and Africa at Credit Suisse said: “Bearishness for gold was a very clear consensus. It’s not about just not buying gold, it’s about shorting it, or wagering on a drop.”

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