The GOLD PRICE retreated from a one-week high near $1411 per ounce Thursday morning, dropping back through $1400 as European stock markets reversed earlier losses.
Tokyo's Nikkei stock index ended the day 5.5% lower, its second slump in 6 sessions after nearly doubling in six months to hit 5-year highs.
New York stock futures pointed higher, while commodities slipped and major government bonds held steady.
Silver bullion tracked the gold price's earlier 1.4% rise, before also slipping back and trading beneath $22.60 per ounce.
"The physical market seems to be loosing a little steam," says a note from Swiss refining and finance group MKS, pointing to the recent surge in Asian gold demand.
"Physical buyers have helped to limit declines," says Cinda Futures' senior trader Yang Shandan in Hong Kong.
"But they have also become more price-sensitive and tend to stay on the sidelines near $1400."
Calling $1400 "psychologically important", Marex Spectron's David Govett advises short-term traders to buy gold "if we can break and hold above" that level.
But "the bearish trend remains in place," counters a technical note from bullion bank Scotia Mocatta, even though "we are short-term neutral until this consolidation period is resolved."
The base of gold's current consolidation sits at $1339, says Scotia, pegging resistance at last week's gold price high of $1414 – the same level identified today by UBS's chart analysts.
Following mid-April's 17% crash in gold prices, "Important liquidations in percentage terms are familiar in this market," says the latest analysis from Italian bullion supplier Italpreziosi.
Pointing to the gold price slumps of May 2006 (-26%), spring 2008 (-30%), and Sept. 2011 (-21%), "what seems different is that the crash was accompanied by a 'bear media campaign', which could undermine confidence in the multi-annual bull trend," says the note.
Wednesday saw the first uptick in nearly 3 weeks in bullion holdings at the world's largest exchange-traded gold trust fund, the SPDR listed in New York (ticker: GLD).
Only the 6th increase in 2013 to date, however, it left the SPDR's total holdings more than 5% down for the month of May, and 25% below the record of Dec. 2012.
Gold imports to Asia in contrast are on track for a record quarter said market-development organization the World Gold Council on Wednesday.
"Even if E.T.F. outflows continue in the United States," managing director Marcus Grubb told Reuters, "it is quite likely that gold will find a ready market among Indian, Chinese and Middle Eastern consumers who are taking a long-term view."