Gold has suffered a serious setback after it failed to break above a key resistance around $1380 in June and since then it has struggled to maintain the upside pressure. $1300 area acted as key support until late September, when the price broke below that level. Gold is currently struggling around $1270 area and could face further downside as some of the key fundamentals below is not being very supporting of the yellow metal -

• Federal Reserve and the Dollar: The dollar has been going strong lately as the focus shifted to the rate hike from the US Federal Reserve. Higher interest rates from the Fed would make the interest bearing securities more attractive compared to the yellow metal as a strong dollar taking its toll.
• Physical demand: China and India are the two biggest consumers of gold but this year the demand has been lackluster. The demand in India is down 20 percent this year and demand in China is down 15 percent.
• ETFs: Since the 2008 crisis, gold ETFs have become a major investment product. This year’s rise in the gold was supported by massive inflows of money into ETFs. Approximately $27 billion has flown in; however, latest selloffs were also triggered by a major liquidation of ETFs.
• Risk aversion: There has not been much of risk aversion in the market. The US benchmark stock index S&P 500 is up for the eighth consecutive year.
• US election: US election outcome is likely to be an influencing factor. Gold is up with Trump and down with Hillary, probably because a win by Hillary would mean status quo.
• Brexit: Brexit is back in focus and the triggering of Article 50 could lead to a massive risk aversion, benefiting gold.