Originally Posted by mhgaffney
How to explain the present drop? Good question -
It's a healthy pull back as it simply rose way too quickly. Speculators took some profits and weak hands folded. Furthermore the CME raised margin requirements for the paper traders. That means they have to bring more real cash to the table to trade their contracts. This too adds stability to the overall price/base of gold.
Furthermore the USD has "gained" strength because of the turmoil in Europe. Kinda scary to the think the USD is actually considered a safe haven for the moment. http://www.marketwatch.com/investing/index/DXY
Click on one year or 3 month chart to see what I mean.
The swiss lost that status when they pegged their franc to the Euro.
Smart money is buying this dip.