Gold to fall below $1,500 - CitiFX
* Gold could retest $1,535-1,485 area in near term-CitiFX * Becomes risk-off trade; nervousness has further to run NEW YORK, Oct 18 (Reuters) - Gold could fall below $1,500 an ounce in the near term, as bullion has underperformed other assets and appears to have lost its safe-haven appeal, CitiFX said on Tuesday. The technical research arm of Citigroup said, however, it still expects the precious metal to rise above $2,000 an ounce after a correction, and it will eventually trade as high as $3,400 an ounce. "Gold has gone from being a protection against 'risk off' to a 'risk-off trade' in itself...We still believe that this market nervousness has further to run in the coming weeks or months," CitiFX strategists said in a note. CitiFX said that there is a high probability that gold will at least retest the area down around $1,535-$1,485, and possibly lower still."We would not be a buyer of gold for the foreseeable future," it said. In recent weeks, gold has underperformed major currencies, fixed-income products, crude oil, and has outperformed equities by not as much as other asset classes, CitiFX said. "When a hedge to risk starts losing money in an anti-risk environment but rallies in a pro-risk environment, something is wrong," it said. Gold -- traditionally a safe haven in times of economic uncertainty -- slumped 1 percent in the last two sessions, moving in lock-step with riskier assets such as equities, which ended sharply lower on Monday. On Tuesday bullion ended down 0.5 percent at around $1,660 an ounce, after partially recouping deeper losses despite a late-day U.S. equity market rally.
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