"If there was solid support for gold you would not have a 3.5%...

"If there was solid support for gold you would not have a 3.5% price reduction in volitile market."

David, ever heard of a famous saying that bull takes stairs up and a lift down ? Could you explain then why gold is now sitting at 1663 if people did not really "believe" thats its a safe haven ? If you're the "buyer", who you buy to head to head with the sellers momentum? Or would you wait for the sellers to push the price down so much so you can buy it cheaply? Pretty simple.

"Gold is down 1% from its all time high".

Give me something that is closely good performance (or better) as gold. USD ? Oil? DOW ? S&P ? Probably none close to it. Why is it near the all time high if gold is not quite the safehaven people make out?

Its not just an "inflation" hedge, although its inevitable given the amount of debt countries around the world are accumulating, but its also a measure of instability. Would you hold USD given that more US dollars will be printed, government mismanagement and having no bipartisan whatsoever? Do you believe Ben Bernanke and Timothy Geithner are both competent and take interest of their country seriously ? Institutions and investors (I think you mean traders, i dont think investors risk selling gold at this time) will take profits from gold. Yes, that is true, but where would they put their money? Cash is king isn't true anymore with real inflation price jacking up and EU/US in the downgrade storm.

Institutions take profits. Hmm.. Yes, but think of the one who are waiting to buy. Chinese? Indians? and other "investors" ?

I personally believe it'll be the race to "fake the bottom". Once the music stops, and you have nothing left in your hand (not you personally, i meant general people), then the real game begins.