I'm not sure how anyone can argue that buyers are absorbing the selling. If they were the price would be steady or going up in USD terms, its not. Its quite apparent since the 1st of Sept. when gold was trading $1290 there has been considerably more sell pressure than buy pressure, as gold is down almost 6% in three weeks! What didn't help imo was a producer selling 2 mio of hedging in August. This is the sort of blood in the water any hedgefund would want to sense if looking to short gold. In saying that its really just a USD move as proven by gold in currency terms.
How low can gold go? I suspect we will see a shove through $1180 but a quick bounce back & I mean real quick as the market is already short & if we get to a level like that it will be substantially shorter. Physical demand is incremental & will help slow gold's fall, but it can't combat the paper market once its in full swing. The upside is the paper market needs to cover at some point & as we are coming up to quarter end, I suspect that may be a catalyst.
