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It was a negative kind of day across all markets as weak US earnings and ratings downgrades in Spain contributed to a broad based sell off.

Spot gold lost all of its Monday’s gains trading to a 6 week low of $1705 despite the lack of data flow from the U.S and Europe. Wednesday brings a slew of data that will be most definitely market moving. European PMI and US housing data, as well speeches from ECB head Mario Draghi and US Federal Reserve chief Ben Bernanke will most certainly give the markets some direction.

Yesterday saw heavy losses for the precious metals as hedge funds exited position taking out weak longs with them. Spot gold dropped to a one month low of $1728.

Long liquidation was the order of the day Monday with a bounce back on Tuesday trading. The main catalyst was China may not need further stimulus measures after exports increased more than expected in September. China’s consumer price index for September rose 1.9 per cent from a year earlier, down from a two per cent advance during August.

Precious metals continues it consolidation pattern lower as the market digest U.S data releases and awaits Chinese data over the weekend.

Spot gold traded lower to $1758 as traders booked profits ahead of the weekend not wanting to remain long due to the release of China's trade balance due to be released Saturday. U.S data released this AM saw University of Michigan's consumer confidence report that its main index to a 5 year high of 83.1 in October from 78.3 last month. US PPI for September came in at 1.1%, core PPI was flat, below the expected and previous reading of 0.2%.

The weakness from last week has carried over as spot gold has dropped to a two week low of $1755 amid more Eurozone worries.