Gold stabilized on Tuesday holding just above a five-year low, but investors still see further price falls a day after the metal tumbled 4 percent.

Reflecting losing interest in gold, holdings in top gold fund SPDR Gold Trust fell to the lowest since 2008.

Bullion, after sliding on Monday by the most since September 2013, is trading just above the critical $1,100 an ounce support level, another breach of which could lead to a further selloff, traders and analysts say.

“This clearly means that the bearish sentiment for gold remains even at this juncture,” said OCBC Bank analyst Barnabas Gan. “I’m still looking at more downside risk for gold,” said Gan, who has forecast a price of $1,050 by year-end.

A looming increase in U.S. interest rates has been a key driver in gold’s descent along with sluggish demand in top consumers China and India. China disclosed on Friday a 57 percent increase in its gold reserves from 2009, far less than the market had estimated.

Spot gold XAU= was up 0.4 percent at $1,101.29 an ounce by 0616 GMT, after an early low of $1,096.65. The metal fell as far as $1,088.05 on Monday, its weakest since March 2010.

U.S. gold for August delivery GCcv1 slipped 0.5 percent to $1,101.80 an ounce.

Huge volumes sold on a key Shanghai physical contract hastened gold’s 4 percent slide in a matter of minutes on Monday, as China appears to be shunning bullion.

Investors have found less and less reason to hold bullion as a safe haven, with the dollar strengthening ahead of what is expected to be the first increase in U.S. interest rates in nearly a decade.

Gold’s slide has helped wipe out half the gains from the last decade’s historic bull run, taking prices back to a key chart level and threatening a break toward $1,000 an ounce.

But the price is unlikely to fall sharply again on Tuesday as it did when it fell 13 percent over two consecutive trading days in April 2013, wrote Phillip Futures analyst Howie Lee.

“Those two infamous days in gold’s history was marked by a constant decline in prices throughout both sessions, while yesterday’s tumble was marked by a one-minute drop followed by a substantial recovery,” said Lee.

“A repeat of history does not look to be on the cards but we still expect heavy downward pressure on gold in the future. It looks to be a matter of time before gold breaks again.”

Gold holdings at SPDR (GLD), the world’s largest gold-backed exchange-traded fund, dropped to 22,327,678.15 ounces HLDSPDRGT=XAU on Monday, the lowest since August 2008.

Source: Reuters