Gold failed at the 100-day moving average earlier in the day and has now plunged nearly $30 to $1240.
The bulk of the selling came as US traders arrived at their desks. Yesterday’s FOMC decision highlighted the resolve of the Fed to end QE despite some market hiccips. The soft German inflation numbers may have also highlighted the disinflationary pressures in the global economy, rather than the rising price scenarios gold bugs love to talk about.
Another factor could be the arrival of Chinese New Years. The holiday is a major gold gifting holiday but the bulk of buying is now likely done and that could be the queue for sellers.
Gold daily
Technically, the picture for gold remains mixed. Prices continue to consolidate in the $1231-$1272 zone. A longer-term double bottom is possible and the choppiness could be part of a basing phase.
