Gold is being sold off because they raised the costs of holding...

Gold is being sold off because they raised the costs of holding contracts. Also, a mystery European Bank (probably French) was given 488 Billion Euro to tide them over last week. The Chinese will not do business with the French Banks. So the French banks, French Government or both are selling gold due to an internal liquidity crisis caused by a big debt crisis (let's call it Lehman Bros 2).

This happened in 2008 in the USA when the gold price dipped from over $900 to $680 (or thereabouts) very rapidly only to rebound to where it is now. Gold at $1650 is still higher that we'd have thought in January this year.

When the Euro collapses (and it will next year under Italy's debt) then there will only be 2 exit doors - one marked $US and the other marked GOLD. The USA is already broke so what would you prefer? If you were Chinese, what would you buy?

With the USA looking at QE3 (without calling it QE3) then they may as well have monopoly money out there as currency too! Do you realise that they are rolling over $300B a year from money being repaid from QE1? QE3 has already started. It is a perpetual motion machine. Panic? You haven't seen panic yet. Run from financial stocks because this next stockmarket fall will be a doozy.