Goldman: Don't get too greedy, close out your gold shorts

The spot gold price was down 0.5% to $1,413 an ounce on Tuesday in New York as it consolidates above the $1,400 an ounce level following last week's torrid trading.

Gold has regained some of its footing since dropping to a multi-year low on Monday April 15 of of $1,326 an ounce, prompting Goldman Sachs to recommend to its clients to close out their bets on lower prices.

Shorting gold was the trade the investment bank famously advised a few day ahead of gold's $200-plus decline that began Friday 13 April.

MarketWatch reports that while Goldman believes the short term downside is limited, further out the outlook for gold remains weak:

"Our bias is to expect further declines in gold prices on the combination of continued ETF outflows as conviction in holding gold continues to wane as well."

The gold price is down around 15% this year and last week's dramatic fall – the worst since the start of futures trading in gold – dragged the metal it into official bear territory, defined as a 20% decline from a high.

Gold hit a record $1,909 an ounce intra-day on 23 August 2011, but a the next day suffered one of its few triple digit one-day losses when it plummeted $105, ending the week down more than 10% from the all-time high.

Adjusting for inflation, gold's highest price point ever was on January 21, 1980 when the precious metal hit $850 only to plunge the very next day to $737.50, a 13% fall.