Gold (XAUUSD) had what appears to be a difficult day at the office yesterday, and whilst this looks dramatic on the charts, attention should be paid to the scale. In fact this is only a decline of $30, a value that is relatively tame compared to some days. This dip has a corrective feel to it, in that what appear to be strong , relatively short-lived, declines are nothing more than evidence that a market that is positioned one way (ie Long in this case), and is reducing exposure in the absence of enough momentum to make a rewarding investment. Markets always, but always, follow the path of least resistance and if there is an absence of new buying interest emerging to continue the rally then a loss of momentum is only to be expected. The cost of carry might also be a factor, currently running at just under 20 pips for Longs. There is a rising baseline of support around $1280, but it does not appear to be particularly robust, and therefore a breach would not be particularly significant. We think the Gold market will continue to find value on any dips, but rallies also look unlikely to be spectacular. We’d remain comfortable trading from the Long side but are ever mindful that as we approach the weekend liquidity tends to evaporate and that as a result price action can fluctuate outside of expected deviations.