Short term, gold looks poised to retest 1180 and, in our opinion, break down below this key level and trade all the way down to the next major support level at 1050 early next year.
Equities remain strong and continue to attract investment fund flows away from commodities and other asset classes, whilst the dollar weakness has not helped gold at all as would normally be expected. This is particularly worrying for the gold bulls, as any dollar rally would see gold under even more pressure.
We expect gold to hit 1000-1050 early next year - the key question for us is whether the market can recover from there and start to rally, or whether continued equity strength, rising interest rates, further economic improvement and reduced quantitative easing will see gold fall even further out of favour and drop towards 700-800.
Today's video for subscribers reviews the year in gold and looks in more detail at the short term picture.
Happy New Year to all of our readers and loyal subscribers!