Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Gold slides more than $20 in two days

By Aaron Smith, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Gold prices have taken a dive this week as investors rekindle their faith in the stock market and the almighty dollar.

"There are a lot of people throwing in the towel as gold moved below $1,100 for the second day running," said Adam Klopfenstein, senior market strategist at commodities brokerage firm Lind-Waldock. "I do think the bull case for gold is going to be on hold for the rest of the year."

How much did you spend this year on holiday gifts?
  • More than last year
  • Less than last year
  • The same as last year
  • I don't buy holiday gifts

Gold slipped below the $1,100-an-ounce benchmark on Monday, falling more than $15 to close at 1,095.40 per troy ounce, as the Dow moved in the opposite direction, jumping 0.8%. The yellow metal continued its decline during Tuesday's session, falling $9.30 to settle at $1,086.70 and ounce, as the Dow rallied.

Gone are the heady days of early December. The price of gold has steadily tumbled since peaking on Dec. 3 at $1,218.30 per troy ounce, a record when adjusted for inflation.

Jon Nadler, senior analyst with Kitco Metals Inc. in Montreal, said that gold had been riding a "bubble" of "hot air," with some of the more fearful investors suggesting that the dollar might be replaced by the barter system.

"Don't get carried away with scenarios of 'Mad Max'," said Nadler, referring to a film set in the apocalyptic near future.

Meanwhile, the dollar has been on the upswing, reclaiming its international status as "the currency of choice on the risk aversion side," said Klopfenstein of Lind-Waldock.

"People are starting to see the dollar rally and that's been a big catalyst for bringing gold off its high," he said.

Going forward, Klopfenstein expects gold to rise again in 2010 on a weakening dollar. He believes that Federal Reserve Chairman Ben Bernanke won't be able to raise the federal fund rate fast enough to control inflation, and that as a student of the Great Depression, he will favor keeping the economy stable over capping inflation.

The price of gold reached its true record nearly 30 years ago, as measured in dollars adjusted for inflation. Gold peaked on Jan. 21, 1980, at $825.50 an ounce, in 1980 dollars. That translates to an all-time record of $2,163.62 an ounce in 2009 dollars. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.92%3.83%
15 yr fixed2.99%2.98%
5/1 ARM3.27%3.18%
30 yr refi4.01%3.92%
15 yr refi3.08%3.08%
Rate data provided
by Bankrate.com
View rates in your area
Find personalized rates:
Index Last Change % Change
Dow 17,813.39 1.20 0.01%
Nasdaq 5,116.14 13.34 0.26%
S&P 500 2,088.87 -0.27 -0.01%
Treasuries 2.23 -0.01 -0.49%
Data as of 2:35am ET
Company Price Change % Change
Pfizer Inc 32.87 0.90 2.82%
HP Inc 12.64 -2.00 -13.66%
General Electric Co 30.36 -0.30 -0.98%
Bank of America Corp... 17.44 -0.03 -0.17%
Freeport-McMoRan Inc... 8.10 -0.20 -2.41%
Data as of Nov 25


Looks like the Magic Kingdom is lacking some sparkle. Disney's cable channels have lost millions of subscribers in recent years. More

Brazilian police arrested a prominent senator and billionaire CEO for interfering in the investigation of Petrobras, which has pushed Brazil into recession. More

Watsi crowdfunds donations to cover healthcare costs of those in need. And it's seeing a surprising trend: micro-donations via the popular Chinese social networking app, WeChat. More

Some of the coolest toys this year are from small businesses. Here are 10 hot toys that just might be a smash hit this holiday season. More

Facebook just increased the amount of paid time off new dads working at its international offices can take. More