Rallies continue to be sold in the yellow metal as the bounce higher ran out of steam near a tough resistance level at $1330. Many traders were watching to see how gold would react on any approaches to this level and whether or not it could maintain its gains having secured a foothold there. It did not... that triggered some long liquidation as well as bringing in fresh short sellers.
Bears are trying to break the market down below the $1300 level. Bulls are attempting to hold it above there. We will know very soon which side has the advantage near term. Rallies however continue to be seen, for now, as fresh selling opportunities. It is going to take some more positive performance on the price charts for that to change. The failure to hold above $1330 is not helpful to the bulls in that regard.
There seemed to be some strange goings on in the Treasury market today with the long bond soaring to 131' 12 overnight only to puke out most of its gains as the trading session wore on. Treasuries look as unsure of their next move as the gold market does right now. Higher yields seem to be here to stay but no one knows exactly "how high" those yields will be before stabilizing. The truth is that the US economy is in no shape to handle higher interest rates and most bond traders realize that. They are also trying to come to terms however with any Federal Reserve "tapering" or "lack of tapering" to gauge whether they should be buying bonds or selling bonds. Each piece of economic news is therefore having an overexaggerated impact on the long bond as it confirms or denies traders' perspectives. The result is more volatility and herky-jerky type price action as firm convictions are lacking.
Markets like these are the realm of the one- three minute bar chart geeks and scalpers.