Breakdown. 

As I discussed this morning, gold had well and truly rolled over after its equities rout-induced bounce, and was again staring at vital support at $1180, with an abyss beyond that.

It’ll be interesting to see if it does capitulate from here. The swan-dive below support has come in the wake of the BOJ announcement that its increasing its QE program. This has seen risk assets (equities) fly and gold sell-off.

A gold rout on the back of tightening US monetary policy is a fairly straightforward affair; but one which took its immediate catalyst from looser Japanese monetary policy is a bit more uncertain from where I’m sitting. The outlook for US monetary policy of course not at all favourable to gold, so my expectation would be for a continuation- there’s nothing but air below 1180- but we’ll have to wait and see.