Gold bears say charts point down toward a 3-year low

Spot gold's sharp tumble this week sent a bearish signal to many technical analysts, suggesting the precious metal could slide further toward three-year lows.

The bears pointed to bullion's 2.65 per cent slide on Wednesday off of an exact double top at its one-month high. They said this indicated that impetus to push above the $1,347.69 per ounce high had run out. Despite the bearish consensus, at least one analyst held out hope that gold could rebound to the highs of around $1,700 an ounce early this year.

Gold's failure to scale the $1,350 peak of June 20, a day when gold dropped almost six per cent, brought the bearish forecasts out. Chartists said they see targets down to $1,295, $1,265 and possibly lows last seen three years ago.

"Near-term topping signals against the $1,350 area in gold point to a move back in range toward targets in the $1,260 area," Barclays technicians wrote in their daily Technical Research report.