Gold bullion prices fell to three week lows around $1,410 an ounce Wednesday, as European stock markets ticked higher, reversing earlier losses following disappointing Eurozone growth data. Gold in Euros fell as low as €1,094 an ounce, while gold in Sterling fell below £930 an ounce.

“Gold spot is approaching the support [level] of $1,403 [an ounce],” say technical analysts at Societe Generale.

“There is no significant level of support between here and the low from April 16 in the $1,322 area,” adds the latest technical analysis from Scotia Mocatta.

The world’s biggest gold exchange traded fund SPDR Gold Trust (ticker: GLD) could lose up to a further four million ounces (almost 125 tonnes) to add to the nearly 300 tonnes it has lost through redemptions since the start of the year, according to analysts at Deutsche Bank.

“We expect that the bulk of the drawdown comes from institutional investors rather than retail investors,” says a report from Deutsche. “If in fact only institutional selling is occurring in the gold E.T.F. then we expect that nearly two-thirds of the selling that is likely has probably already passed. As SPDR is roughly half of total physically backed E.T.F.s, this could imply a further 4 to 8 million ounces [approx. 125 to 250 tonnes] selling [from all gold E.T.F.s] if macro fundamentals continue to move against gold.”

“In the short term, gold prices remain caught between the recent slowdown in US activity and the significant decline in ETF holdings,” adds a note from Goldman Sachs, whose analysts have a 12-month gold forecast of $1390 an ounce. “While the sell-off in gold prices has been faster than we expected, with prices below our near-term forecasts, further unwind of ETF positions would likely continue to precipitate this decline…going forward, we expect that gold prices will continue to decline should our economists’ forecast for a reacceleration in US growth later this year prove correct.”

“Gold is likely to remain sensitive to potential dialog regarding the Fed’s QE intentions,” adds a note from HSBC, referring to the US Federal Reserve’s ongoing $85 billion a month quantitative easing policy. “Further comments by Fed members for scaling back QE would be negative for bullion prices.”

On the currency markets, the Euro fell to a six-week low against the Dollar Wednesday, while the Yen touched a fresh four-and-a-half year low, as Japan’s Nikkei 225 index breached 15,000 for the first time in over five years.

Over in Europe, France fell back into recession in the first quarter, according to provisional GDP data published Wednesday that show a second successive quarter of negative growth. German Q1 growth meantime was 0.1%, provisional figures show, less than the consensus forecast among analysts. GDP for the Eurozone as a whole contracted 0.2% in Q1, data published this morning show, to make a 1% year-on-year drop in economic output.

Ratings agency Fitch meantime upgraded its credit rating for Greece Tuesday, citing progress on cutting the government budget deficit, although Fitch still rates Greek government bonds as junk with a rating of B-.

The latest Bank of England Quarterly Inflation report, published this morning, shows a “welcome change in the economic outlook”, according to outgoing governor Mervyn King. “Today’s projections are for growth to be a little stronger and inflation a little weaker than we expected three months ago,” King told reporters this morning.

“That is the first time I have been able to say that since before the financial crisis.” King added however that “the challenges facing central bankers are as great as they have ever been”.