Gold falls to the low of the day
Gold sank through $1700 and continued down to a session low of $1694 in a $16 decline. It’s the third day of selling this week and is being helped along by a strong dollar today.
The drop wipes out the mid-may rally and puts gold back in the middle of the April range.
The better risk tone and big moves in stocks are sparking flows out of gold and into risk assets.
Technically, this looks like a false break or at the very least a retest of the old range.
If central banks are the drivers of this rally, you have to worry about a scenario like the Bank of Israel early this week, where they upgraded growth forecasts and hinted at a time on the sidelines. I can easily see the Fed following the same playbook and that would undermine the short-term case for gold. It’s the same thing on the fiscal side where the better mood will slow the appetite for spending.