Gold Down to Lowest Level in 21 Months

The sell-off of gold continues, as institutional investors scramble to cover the loans being called for bad investments.

Today's prices fell to a 21-month low, and may end the day at its lowest historical weekly performance.

With the gold and general commodity sell-off, the normal market reaction to poor economic times isn't being played out, as various institutional funds look everywhere for cash. It has also uniquely strengthened the U.S. dollar because of commodities being denominated in it.

Gold today dropped as low as $681 an ounce early in the session on the New York Mercantile Exchange, although rebounding later to $708.70. That's the lowest gold has been since January 11, 2007.

There's nothing gold investors can do but wait for the unwinding of the positions held by large institutions before things will revert back to normal measurements.

The problem is some of the financial instruments are so complex that we have no idea of the timeframe involved before the positions are covered.