Have Beleaguered Gold Prices Hit a Bottom?

SYDNEY-AUSTRALIA (July 21) After a turbulent second quarter, the precious metal has traded in a relatively tight range in July, hovering between $1,220 and $1,250 an ounce. So, has the beleaguered yellow metal reached a bottom, or is there more weakness ahead?

According to experts downside from current levels will be less violent, however, further losses cannot be ruled out.

"I think the worst is behind us. A fall from $1,900 [in 2011] to $1,250 is a 34 percent fall and I don't see it falling another 34 percent from here. That said, I do not think we have hit bottom yet," Warren Gilman, chairman and CEO of CEF Holdings told CNBC on Wednesday.

The metal suffered its worst quarterly performance over the April to June period, plunging 23 percent, driven by relentless selling by exchange traded funds (ETFs).

The headwinds for gold in the coming months include rising U.S. Treasury yields and strength in the U.S. dollar, said Gilman, in addition to continued liquidation by ETFs.

Higher U.S. Treasury yields - which have risen sharply over the past two months - dampen the attractiveness of holding assets such as gold which offer little yield. A stronger dollar, meanwhile, is negative because gold futures, which are traded in dollars, become more expensive for investors who use other currencies.

Victor Thianpiriya, commodity analyst at Australia and New Zealand (ANZ) Banking Group agrees the bottom for gold has not been reached.