Last week’s sharp spike in gold that took prices to intraday highs of $1260.00 appears to have ended with spot gold back under $1200.00.

The decline coincides with an apparent return of appetite for risk among investors who had, only a week ago, sought out safe-havens in the face of dramatic falls in global equity markets. Selloffs driven by fears over the outlook for China and a deteriorating economic picture in the US and a continuation of hawkish rhetoric from Fed Chair, Janet Yellen had taken their toll on equities.

Japanese stocks entered bear market territory while European and US equities fared little better with falls of 3% commonplace. Gold had appeared attractive as bets increased that the next move in US interest rates was more likely to be a cut than a hike.

“Gold has been on the way up since the beginning of the year so it would be unfair to suggest that this latest surge was based entirely on last week’s equity market turmoil,” remarked Harry Coolidge, a senior economist at Mizuho Corporate Global.

“Gold is not done here by any stretch. The Fed and, indeed, all the other central banks are in a very tricky situation. Right now, they appear impotent because no matter what they do – negative rates, guidance, rhetoric – they don’t seem to be able to move markets in the way they want and gold tends to do very well in environments like that,” he added.

Mizuho Corporate Global raised its price target for gold in 2016 to $1450.

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