As we approach the end of 2013, the price of gold has taken a beating the last couple of days and this recent drop to just under $1,200 is setting up for gold to have its worse performance in 30 years. Combined with its first annual price drop in 13 years, the year 2013 is set to give up a lot of the gains from gold's exceptional run over this time. The U.S. Federal Reserve's tapering announcement from this week, where it is scaling back its monthly asset purchase program with more future reductions next year, has also played a role in gold's (and silver's) decline this week.
Overall, 2013 has been a pretty brutal year for gold bugs, gold investors and most gold mining companies. We are starting to see a lot of people jumping off the gold bandwagon. Some market watchers (including Jim Rogers and Martin Armstrong) have called this leg lower for the price it gold, before it (ever) heads back up again. The Chinese (and Indians) don't seem to care and continue to buy physical gold but only time will tell if they end up holding the proverbial "bag", as this price action is likely to shake out a lot of investors.