Data from China over the weekend showed the PBOC didn't buy and gold in June, after buying none in May.
That news has weighed on gold heavily today, erasing what looked like it could be a breakout on Friday.
That highlights the push-and-pull in gold at the moment. Much of the run-up over the past year was driven by reserve diversification and that appears to be cooling. However there is a fresh catalyst with US data deteriorating and the prospect of a September rate cut and a worsening economy.
Moreover, the political unrest in much of the world could be catalyst for gold.
So far, those factors have played to standstill since April but I think ultimately it's the sovereign flows that matter and you have to be cautious with China suddenly sidelined.
