The price of gold dropped over $15 yesterday, the largest intraday decline since January 30th. The precious metal has had an impressive run since testing the 2013 low at just below 1200 gaining over $150 in two months. Emerging market fears have led to a flight to safety to both gold and US treasuries and although Ukraine is far from out of the woods, the ouster of President Yanukovych has at least stopped the Ukrainian capital Kiev looking like trench warfare and an IMF aid package will ease concerns of economic disaster. Emerging markets are still at risk from hot money outflows from investors seeking safer assets ahead of central bank tightening and gold should continue to be a beneficiary of this. The poor weather in the US has caused some poor data releases and led the market to question whether the data-dependent tapering of asset purchases by the US Federal Reserve might be paused. The possibility of reversing tapering and even adding to asset purchaces again and the likely resulting devaluation of the dollar would be very positive for gold. Preliminary US GDP numbers this Friday and the US payrolls report next week will be key data points to determine US central bank action. Key Technical points Bullish • Price above 21 and 200 day SMAs denoting an uptrend • Price forming higher highs and lows Bearish • 1350 has acted as support and resistance since the rapid decline on April 15, 2013 • The top of downward trendline connecting the highs in May and August of 2013 • RSI divergence above 70 level • Bearish engulfing candlestick pattern