If BNN is to be believed, today's gold reaction is a result of re-balancing the importance of gold in key commodities indexes. Commodities-index based funds will be forced to liquidate gold over this week to come in line with the new format of the indexes.

If Jim Rodgers is correct, one of his assertions is that the current commodities indexes are not very reflective of the actual commodities complex as a whole, anyways. (Which is why he created the RICI index).

I guess one thing that will come out of this is that we will see if there is a market to buy all of the gold being dumped on the market. I think there is. I think the price of gold will turn around and start climbing again in a couple of weeks.

I once said that the restrictions placed on purchasing by the actual mandate of most mutual funds prevents them from buying gold shares and forces them to sell shares at inopportune times. It appears that the commodities market funds work the same way.

At some point in time economic climate will trump arbitrarily defined restrictions on owning physical gold and gold shares. Things aren't getting better.

I guess us independent investors have some distinct advantages. Hopefully we can capitalize on them.