This "whippy" market action is difficult to trade and we are happy to wait until a definite trend develops before entering the market again. Any rallies are being sold into, though the propsect of further QE and general economic uncertainty are seeing some buying on price dips. It is clear that the trend remains down overall, for the time being.
Inflation is falling all over the world, which is usually negative for gold, although "real interest rates" (interest rates less inflation) are still negative and are expected to remain so for some time with interest rates at or close to zero. This is positive for gold as the correlation between negative real interest rates and a rising gold price is very strong.
We consider that falling infation rates are actually positive for gold at this particular time, as it clears the way for more QE or other stimulus action without the threat of rampant inflation taking hold.