Very counterintuitive -- gold dropping in the face of a banking collapse -- the potential of a global banking collapse should make gold much more attractive.

Only two things make since in driving down gold (1) strong expectation of a severe global depression, unlikely cause at this point IMO (2) massive liquidation of gold positions by desperate hedge funds and central banks to raise currency for these massive liquidity injections.

I would think that it is #2 and that gold will rebound strongly when the selling dries up.