in a needle-sharp phrase, gold got hammered because of a technical sell-off. Small traders often find themselves in a minefield that they do not know exists. When the big players set their mines to explode - and it could be for a dozen different reasons - the little guy is left amidst the rubble. There are some other trends and indicators that have been pushing on gold. The inexorable rise in the U.S. equities markets, for instance. The torrent of money into what many consider an investment area that is already over-bought continues because at the moment it is the only game in the world that is a) showing growth and b) is reasonably stable.
A strengthening dollar added a minor shove down to gold, but when the review is final, it will be seen that technical trigger points were hit by large funds, governments who hold the yellow metal, and hedgers who simply did not renew contracts. There is no reading that kind of action. Those sell orders are held very close to the vest since millions, even billions, are at stake should news leak out.
The grim economic news from Europe continues, although it helped gold not one jot. The money fleeing an iffy European investment strategy is simply migrating into U.S. equities. Unemployment in Europe is up to 12% and manufacturing has slowed. It is not a matter of "if" but "when" this will affect the United States, Chinese and Japanese economies. U.S. employment data for March is due out Friday and is expected to yield another report that shows 200K in new jobs; the 7.7% unemployment rate, however, is not going to budge.
The only true fundamental possibility could that ignited the sell-off (one we could not see because it would have had to entail a leak) is that the jobs-created number is going to show much higher figures than anticipated. This would threaten the continuation of QE3. We shall see what Friday tells us.