Update: Gold has now broken below $1200 to $1197.

Gold is now down on the day at $1226 after hitting $1244 in Europe. It follows a $50 decline yesterday.

Part of the reason is that Fed comments and economic data make it clear that tapering is conditional. The second factor is broad US dollar strength. But the main factor is momentum; the chart is broken and the gold bugs are scrambling to the exits.

I have been bearish gold all year and short for most of it. I covered some shorts yesterday but there is is a continued risk of a disorderly flight from gold as miners hedge en masse and gold funds are hit with waves of liquidation.

Below $1200, there is some support at $1157 followed by $1025.

gold weekly chart

The life raft for gold bulls at the moment is the idea that $1200 is the shutdown point for many mines. That may be the case but that doesn`t make it important technical support because it could be easily overwhelmed by jittery speculators.