Macro Man Explains Recent Decline In Gold

And makes an interesting point that pertains to this morning's decline:

Gold (GLD), which until very recently had shrugged off dollar strength (or at least euro weakness) amdist stories of Chinese reserve buying, performed noticably poorly yesterday. Not only did it break the uptrend line off of the year's low, but it also has breached the 55-day moving average, which suggests that some of the momentum crowd may start bailing soon. And if gold loses its luster, the risks must surely rise that equities will, at least temporarily, find that their recent shine gets tarnished.

In other words, gold looks bad on a momentum basis right now. Momentum traders bailing is a likely factor for the drop earlier this morning.

He also suggests that the gold market might be discounting a less accomodative monetary policy by the People's Bank of China, not to mention an upvaluation of the renminbi.