Gold slumped on Wednesday after the durable goods report showed that US business spending continued to rebound last month.Orders for things built to last such as appliances rose 4.8%, the Census Bureau said, while business capital goods orders increased by 0.4%, more than forecast.

The price of gold has breached the psychologically important $1,200 per ounce level after reaching an all-time high of over $1,800 in 2011, as the chart courtesy of the St. Louis Federal Reserve Bank shows. Over the last 10 years, this price level has been an important area of support and resistance as gold first rallied following the great economic recession in 2008 and 2009 but then sold off from 2011 when inflation failed to materialize in the global economy.

“What’s happening is, we had a great relief rally that failed at $1,375,”

-technical analyst Craig Johnson of Piper Jaffray said Wednesday on CNBC

In other words, despite the metal’s substantial rise from the beginning of the year through July, the “downtrend resistance” has remained intact.

 “It looks like we have further downside left to go in gold,”
-he added.

 “It’s been a pretty dreadful time for gold . Everything that’s good for growth has been negative for gold ,”
-said Robin Bhar, head of metals research at Societe Generale in London.With traders pricing in a 100 percent chance of a December rate increase, according to the CME Group’s FedWatch Tool, gold ‘s decline may be bottoming out, Bhar added.

“I suspect that maybe 70 percent of the rate rise is priced into the market, and when it comes through, you may have ‘sell the rumor and buy the fact’,”

-he said.

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