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Year-to-date gold has had its worst performance since 1981 and as of midday today it is down over 25% on the year.
Gold is a very divisive investment for many, and there are plenty of traders who believe that the fundamentals will ultimately see it re-test the $2,000 level. That may well be the case, but the bear market it has been in for the last two years will have tested even the most committed of bulls. These two polarised opinions are likely to be tested in the coming weeks.
An issue running in tandem with the downward pressure of widespread opinion is the ongoing viability of many current mining operations. The perception is that spot gold levels below $1200 would make a large proportion of these unprofitable. Obviously with hedging policies in place there would need to be a sustained period below this level in order to affect a change to production levels.
One way or another, spot gold has a big decision to make in the not-too-distant future, and a sizable move either higher or lower is the likely consequence.