The price fell around $30 before recovering almost instantly in a puzzling move which gave traders around the globe a talking point on an otherwise unremarkable day.
Putting the "flash crash" aside, the momentum in this gold rally is slowing markedly and there is a negative RSI divergence on the 4 hour chart that suggests a local top is near. We suspect that the 50 DMA will cap the price and 1250 will not be broken on this rally.
Equities have continued 2014 in much the same vein as they left 2013, whilst oil is tumbling again and the dollar is finding some buying near the key 81 level.
Support can be found at 1237-1240, 1220-1225, 1214, 1210, 1200, 1190, 1188 and 1180. A break of 1180 would have serious bearish implications for gold and suggest a decline to 1000-1050 in the short term.
Resistance can be found at 1246, 1250-1255, 1268-1270, 1277-1280 and 1291-1295. A break above 1268 would suggest an end to the short term down trend, though it would take a break of 1300 to suggest a more significant rally was developing.
Today's video for subscribers looks at yesterday's unusual trading in more detail and our strategy for our next trade.