Commodities Brief: Gold bears salivating at downside potential post $1,500 crack

FXstreet.com (Barcelona) - Gold suffered what only could be interpreted as a concerted attempt by large banking institutions to confirm what had been feared for quite some weeks now, that is, gold entering a medium-term bear market.

As Sean Lee, founder at FXWW, notes: "Hedge funds were the big sellers on Friday, bailing out of longer-term long positions once the price broke below $1515." Sean sees this trend consolidating in the next few months, calling for $1250 as downside target.

In our daily supply/demand analysis, we observe how the "the epic Friday sell-off has now opened the doors to a much larger decline potential... with no major demand level faced until 1432/10, which gives the gold substantial room to keep falling."

The report adds: "Sellers will have to drill down to lower timeframes to spot the most likely areas where the smart money may re-enter the market again. Depending on the profit margin sought after, 1507/1500 is a first 'level on top of level' quality supply."