Wholesale prices to buy gold using US dollars or British pounds fell Thursday morning to trade just 1% below their seven-month highs of the last week.
Commodity prices dropped once again with Asian and European equities, while major-economy government bonds rose after new data showed Chinese factory output falling and Europe's private-economy contracting at the fastest pace in three years.
The euro also slipped Thursday morning, extending this week's drop from four-month highs.
That buoyed prices to buy gold in euros back to €1360 per ounce (€43,725 per kilo) – barely 1% below Sept. 2011's all-time high.
"While the uptrend [in dollar gold] is still intact, price action is lackluster and we have been moving sideways for the past 4 sessions," notes Russell Browne, strategist at Scotia Mocatta in his latest technical analysis.
Overnight in Asian trade, "There was another significant flushout" in crude oil prices, says Alex Thorndike, senior precious metals trader at MKS Capital in Sydney – now down to a six-week low.
"Precious [metal trade] was heavy on the back of this move," says Thorndike, reporting "a significant wash out for the yellow metal in a fairly brutal sweep."
"Short-term," adds a technical analysis from London market-makers Société Générale – and pointing to a continued "down trend" off September 2011's all-time high – prices to buy gold in dollars this morning "broke the steep channel support line which was in place since early September.
"A further correction will develop to 1756/53 then 1745 and 1736."
Priced in the euro, silver today traded at €26.50 per ounce (€852 per kilo) – up 25% since mid-June.
"While [gold] is included in the commodities basket, it is in fact a medium of exchange and one that is officially recognised – if not publically used as such," write Deutsche Bank analysts Daniel Brebner and Xiao Fu in a new report this week.
"We see gold as an officially recognised form of money for one primary reason: it is widely held by most of the world's larger central banks as a component of reserves."
Going further, "Gold is the only currency," said CNBC TV host, self-declared entertainer and educator Jim Cramer to TheStreet.com – the financial site he co-founded in 1996 – on Wednesday.
"People say to me, 'What is the one currency you can trust?' I come back and say, 'Gold, because there is such a tremendous scarcity.'
"People regard it as a precious metal. I think that's the wrong call."
Back in the wholesale gold bullion market meantime,"The flow of business remains dull in the physical space," says one London dealer in a note, "with Indian demand completely off despite being the high season of purchases in front of Diwali."
Luxury goods including watches, pens and iPads "are set to replace gold and silver coins" and religious items as corporate gifts during this year's Hindu “festival of lights” – falling in mid-November 2012 – reports the Economic Times today from Ahmedabad and Kolkata.
"The popularity of gold recycling," adds the Wall Street Journal – which cites industry officials and analysts – "is [also] likely to weigh on gold demand in India, the world's biggest consumer of physical gold."
So far in 2012 some 40% of Indian gold sales have in fact been exchanges of old items, reckons Prithviraj Kothari, president of national trade body the Bombay Bullion Association. That's up from 20% previously.
Opposition parties in India called for a national strike – closing many jewelers as well as other shops, schools and government buildings – in protest at the latest rise in official diesel fuel prices.
Central government workers and pensioners may get a rise to match that inflation in their Dearness Allowance, a cost-of-living bonus given to some 8 million people, according to local press.