Gold prices were consolidating in narrowing ranges in a symmetrical triangle pattern up until I went on holiday last week. While I was away, the precious metal finally broke below the lower trend line of this pattern, which my colleague Matt Weller highlighted on Tuesday. Since then the metal has been going in one direction - south - and is currently lower in today's session, too. With gold falling in each of the past five days, it is therefore on course to record its longest losing run in almost 7 months. So far we haven't seen any major technical signs to suggest a rebound is on the cards. In fact, the 50-day moving average has now crossed below the slower-moving 200 day average to create a so called "Death Cross." This bearish technical development last occurred in mid-February of last year when the metal was trading at around $1600. Although it did not immediately led to a sell-off then, as gold had already fallen sharply in advance to the crossover, prices started to move lower once again a couple of months down the line. Could we see a similar pattern unfold again? At the moment there are at least two major factors discouraging investment in gold: rallying stock markets and the lack of inflation. Admittedly, we did see the Japanese Consumer Price Index for May climb to its highest level since 1991 last week, which suggests the Bank of Japan's asset purchases programme is having the desired effect. But this is likely to encourage investors into buying Japanese stocks rather than gold. Indeed, the Nikkei index has risen sharply in recent trade and overnight managed to take out the 200-day moving average resistance too. But the rate of inflation elsewhere in developed economies has been falling or remaining depressed for months now. The German CPI, for example, unexpectedly fell 0.1% in May, increasing the pressure on the ECB to intervene at their meeting later this week. Until such a time that worries about inflation, rather than deflation, are a concern for the markets, we are unlikely to see any significant gains for the yellow metal. In the more near-term outlook, it is the equity markets and, to a lesser degree, the value of the US dollar that are determining the direction for gold prices. Thus with the US equities near record highs and the dollar on the front foot, it is hardly surprising that we are once again seeing lower gold prices today. One encouraging piece of news for gold bulls is that we haven't seen any corresponding outflows from the world's largest gold-backed ETF, the SPDR gold Trust. The amount of gold in the trust has been unchanged since last Tuesday when 8.39 tons of inflows were recorded from the previous week. At 785.28 tons, gold holdings in the ETF are at their highest level since the first day of May. Silver meanwhile is trading flat today. It is weighed down by the falling gold prices but the stronger Chinese manufacturing PMI that was published over the weekend is providing some support as it has boosted the outlook for its industrial use. Like gold, silver is looking weak from a technical point of view however. On Friday, the grey metal closed below the key $19 mark for the first time since the summer of last year. It has therefore paved the way for a potential drop to the prior low of around $18.20. Even if it manages to bounce there, the bias for silver would remain bearish while it holds below a downward-sloping trend line and the 50-day moving average at $19.50.

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