Gold falls through $1300 trapdoor

The valiant battle that gold has had with the $1300 level has ultimately been lost. 

Gold’s efforts to break higher have failed to convince traders of a shift in sentiment. General selling pressure has dissipated, and the broadly sideways movement of the precious metal is seeing it edge closer to a longer-term downward trend. Gold flirted with breaking this trend a couple of times at the tail-end of last year and the beginning of 2013, but these efforts have ultimately been far from convincing.

With the last weeks’ worth of US data having now been digested, markets are still some way short of a consensus as to if or when the US Federal Reserve will start to taper. The considerably better-than-expected non-farm payrolls caught the markets by surprise, and the reaction was seen in equity markets as well as gold.

Year-to-date this has been a poor year for gold’s price performance, as at present the price has dropped by 24% and is experiencing its worst performance for over thirty years.

Trading volumes are set to be thinner today across the board, and as such we could see a little more volatility in the metal than normal.    

Spot gold chart

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