At one point yesterday, the drop in gold threatened to turn real ugly but it managed to turn things around to close above the 29 April low @ $1,756.13.
That said, the coast isn't clear yet for gold. It is down by nearly 8% this month, staying on course for its worst monthly performance in nearly five years.
The technical picture isn't too pretty either with buyers needing to get back above the 100-day moving average (red line) and $1,800 to reestablish any momentum.
The Fed's perceived policy shift this month has been the key in accelerating the downside move after being rejected near $1,900 for gold. Now price action rests on the edge of the support level pointed out above.
The US non-farm payrolls release on Friday is likely to provide the next catalyst and a strong report there (both headline and wages) may be enough to trigger the next downside leg in gold with the double-bottom in March one to keep a keen eye out for.