FxWirePro: Gold correction may extend towards $1200, bulls still intact

Recent rally in equities and attractive easing package from European Central bank suggesting that investors may reduce their purchase of gold and the yellow metal may correct further, which has fallen more than $50 from its recent peak around $1285/troy ounce.

We expect further equity rally going ahead, however Gold is likely to dissociate itself with equity Bull Run and focus more towards fundamental risks that have been building up for quite some time now. Gold this year, so far has been one of the best performing asset class and we expect the trend to continue.

While spot gold still up 16%, so far this year, latest data from ETF.com shows, Gold ETFs this year received highest amount of inflow. SPDR gold alone has received in tune of $6 billion. Gold has been returning as favorite hedge of investors this year.

We expect Gold to find support around $118-1200 area and likely to gain towards as high as $1350 area.