Precious metals fell back Thursday morning in London, with gold reversing $20 of yesterday's near-$50 rally to trade 2.6% lower for the week so far.
The price of silver dropped almost 50c from Wednesday's peak, but held only 1.1% beneath last week's finish at $21.57.
World stock markets meantime ticked lower, as did major government bonds and commodity prices.
At this morning's London Fix – the global benchmark for valuation and shipping contracts – daily volatility in the gold price stood near last week's 2-month highs at 25.7%.
Silver price volatility – a measure of the violence in its daily swings – last week hit its highest level since May at 43.9%, retreating to 39.2% by Thursday's Fix in the London bullion market.
"It remains a mystery what caused gold to collapse [Tuesday lunchtime]," says a note from Japanese conglomerate Mitsui's trading team.
"[But] many of the precious metals market participants were in Rome for the LBMA conference," they add.
Tuesday's sudden $40 drop in gold – made inside 1 hour – happened right at the start of US trade. Wednesday's sharp bounce in the Dollar price, which came after weak US jobs data, "[still failed] to regain the previous high," says Victor Thianpiriya at ANZ Bank in Australia.
Wholesale prices for gold bullion peaked yesterday at $1324 per ounce, beneath the $1331 level where Tuesday's drop began.
"[That] suggests," says ANZ, "the near-term downtrend remains intact and we remain wary of buying-the-dip while [wholesalers in] China, the natural bid, remains on holiday" for Golden Week.
"With [dealers in] China on holiday," agrees Walter de Wet at Standard Bank, "there may not be the same strength in physical demand for gold if the price moves lower.
"The fact that precious metals have sold off quite aggressively while uncertainty about US fiscal policy lingers, is a bearish sign. However, we do believe that markets in general are looking through the fiscal impasse towards a solution."
Official US jobs data in the monthly Non-Farm Payrolls Report will not be released as scheduled on Friday, the Bureau for Labor Studies says, "due to the suspension of Federal government services" thanks to the US debt limit wrangling in Congress.
Leading bank chiefs met with President Obama on Wednesday to plead for a resolution to the debt-ceiling row before the US begins to default on its debt repayments and obligations.
Yesterday's private-sector ADP report said net hiring in the US economy totaled 166,000 in September, below analyst forecasts of 180,000 and with a sharp downwards revision to August's first estimate.
Gold coin sales by the US Mint meantime recorded a 6-year low over the last two months, notes Barrons magazine.
From Monday this week, adds specialist site Mineweb, the State of Texas is levying no sales tax on gold, silver or platinum coins – a first for US citizens, and eliminating a 6.25% on bullion coin and numismatic purchases made locally below $1,000 in value.
Gold trading in China is also set for further deregulation, the People's Bank said earlier this week, as it opens up new licenses for importing and exporting.
Looking at Chinese premiums, over and above the world's London benchmark gold price, they "did not rise as might have been expected" in September, notes Australia's Macquarie bank, "suggesting a non-price related weakening of Chinese demand.
"In other words, the Chinese [did] not want much gold" as the current Golden Week, typically a strong period for shoppers to buy gold whether as jewelry or bullion, approached.
Across in India today – traditionally the world's heaviest gold consumer market – "Some jewellers are placing orders as they have very thin inventory," Reuters today quotes a private importer in Mumbai.
"They want supplies for Dussehra and Diwali," he added, pointing to the Hindu festivals taking place later this month.
Prices for Indian gold consumers – hit by strict anti-import rules this year, aimed at reducing the country's large trade deficit – eased on Thursday as the Rupee recovered 1% on the currency market.