Gold: ETFs weren't to blame for this move - in fact ETFS saw (small) inflows yesterday, marking the sixth successive day of additions.
Gold: The dollar was a little strong during US hours on Wednesday, although only at levels seen earlier in the day, so that probably wasn't behind the softness in gold.
Gold: Real Rates, although choppy, didn't moved sharply and sustainably higher on Wednesday either.
So what do we think is behind gold's modest, 0.5% decline on Wednesday?
Gold: The answer is palladium (perhaps), with this illiquid, industrial but still-precious metal slumping by more than $100/oz on Wednesday, and weak again this morning.
Gold: We are not experts on the palladium market, but there was no obvious (auto) catalyst behind the move that we can see.
Aside from gravity, after what has been a remarkable run, we suspect some fund profit taking may have occurred. More volatility looks inevitable.