The price of gold has fallen through $1,600 for the first time in six months as investors continue to pile into risk assets such as equities.
In trading today, gold fell below the important technical level for the first time since August last year, down $3.5 at $1,599.
Gold has retreated sharply from its recent peak of $1,790 in October as the eurozone crisis takes a back seat and investors increase their exposure to risk assets.
ETF Securities said the resurgence of risk appetite over the past month has led to a general clearing out of net long COMEX gold positions, pushing the price down.
However, the provider said gold now looks attractive as bargain hunters are returning to take advantage of the recent sharp fall.
"While the technical picture has fuelled the liquidation of gold holdings, macro fundamentals suggest a potentially attractive entry level, as global financial markets remain awash with liquidity, global interest rates are expected to remain extremely low for the foreseeable future, and key macro risks are lingering, particularly for the eurozone economy," the group said.
However, ETF Securities added the recent weakness in the gold price may last for some time if forecasts from the World Gold Council are accurate.
"For 2013, the WGC claims the recent weakness in the gold price might persist as the improved risk appetite prompts investors to rotate to more cyclical assets," it said.
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