Precious metals this morning appear to have recovered some of their losses of recent days. That said, gold in US dollar terms rises above the $1,100 per troy ounce mark.
In euro terms, it has also regained the €1,000 per troy ounce threshold, though this is still lower than the level at which it was trading in January before ECB President Draghi announced the ECB's extensive bond purchasing programme.
Against this backdrop, gold is too cheap, and is still facing headwind from the investment side as ETF investors continue to sell. Gold ETFs tracked by Bloomberg recorded outflows of 4.8 tons yesterday, putting total outflows in the past five days of trading at 28 tons.
Holdings have meanwhile been slashed to 1,560 tons, their lowest level since March 2009. They are now a good 40% below their record high of December 2012.
"The gold price is unlikely to make any noticeable or lasting gains for as long as the outflows continue", says Commerzbank.
