Gold is getting hammered. 

Yesterday we drew your attention to the rise of the euro-skeptics in the European Parliament… and the potential threat to the stability of the European Union they bring. 

But gold didn’t rally…

You may also be aware that Ukrainian helicopter gunships and paratroopers just stormed Donetsk International Airport in eastern Ukraine, killing more than 50 pro-Russian rebels. 

Hardly stability in the region. 

But gold didn’t rally…

Not to mention the trouble in the South China Sea. The Vietnamese government has accused a Chinese fishing boat of ramming and sinking a Vietnamese fishing boat near a hotly disputed Chinese oil rig. 

But gold didn’t rally…

And don’t forget the flare up in tensions between China and Japan, after what CNN described as a “close encounter” between their military jets in disputed airspace over the East China Sea. 

Over the weekend, two pairs of Chinese fighter jets were scrambled and flew unprecedentedly close to Japanese spy planes, which the Japanese claim were monitoring a joint military exercise between China and Russia. 

But gold didn’t rally. 

Then yesterday, gold plunged 2% – the biggest one-day drop since December.

And as you can see from the chart above, it’s broken to the downside of its “pennant” chart pattern (so called because of its triangular shape). 

Gold had been consolidating around the $1,300-an-ounce level. 

The big breakout to the downside yesterday will be seen by technical traders as bearish for the metal. 

The combination of gold’s refusal to rally in the face of rising geopolitical tensions… plus its bearish move yesterday… mean more short-term pain could be on the way.