Gold has started the year off strong and held up surprisingly well given some tough talk from Fed officials today.   After a textbook bounce off support at 114.50, GLD has broken through its short-term downtrend and is now in no man’s land.

Maybe a move to the 50-day is in the cards, but we’re selling as it’s tough to see a sustained move higher for gold in a higher interest rate environment.  The yellow metal faces the headwinds of further tapering, a shrinking  U.S. current account deficit, and a negative second derivative in global foreign exchange reserve accumulation.    Could be wrong and always with a stop.

(click here if chart is not observable)