For the first time this year, gold has broken below the key psychological level of $1,300 per ounce. This year began already deeply entrenched in a dynamic rally which took gold pricing from $1,238 per ounce to $1,365 by the end of January.

Gold is trading sharply lower, with gold futures currently down $26.30, making for a 2% decline. Most active June Comex gold is presently fixed at $1,292 per ounce after breaking below critical support at $1,300 earlier today.

Gold is trading under pressure today, with the most active June futures currently down $7.20, and fixed at $1,313.60. However, unlike many recent trading days, today’s lower pricing is not a direct result of a stronger U.S. dollar. Instead, the majority of today’s lower pricing is due to risk-on sentiment created from an extended rally in U.S. equities.

U.S. dollar strength has been prevalent throughout this year. Its effect has resulted in strong headwinds for the precious metals complex. Dollar strength has been the most significant force involved with limiting any real upside movement.

A solid upside spike characterizes pricing in the precious metals complex as a whole today. Gold futures gained $8.50 (+0.65%) and as of 3:45 PM Eastern standard time is fixed at $1,321.50. 

The catchphrase “follow the money,” popularized by the 1976 film All the Presidents Men, suggested that if you’re looking for a motive behind an event, you simply need to follow the money. In the case of recent price declines in gold, the more appropriate catchphrase would be to “follow the dollar,” or more appropriately, follow the dollar index.

Once again, a strong U.S. dollar has curtailed any sustained upside move in gold. Today, for example, traders bid up spot gold by $5.20. However, dollar strength took away $4.60 of that move. This resulted in gold pricing gaining only $0.60 in the physical market, according to the Kitco Gold Index (KGX).

Considering outside market forces such as dollar strength and higher U.S. equity pricing, gold pricing has held up rather well. In an environment which strongly favors the risk-on asset class over the safe-haven class, gold has traded with a higher daily low for the last four consecutive trading days.

Today’s jobs report came in below expectations suggesting that the Federal Reserve will not raise interest rates aggressively while maintaining a tightening of its monetary policy. This, along with renewed concern about a looming trade dispute between the United States and China, was supportive of gold pricing.