By Jon Nadler
September 17, 2007. Ten days after the beginning of the Fed rate cuts (and financial market turmoil) that would eventually bring gold to $1033.90 on March 17 of 2008. That's how long ago it was that gold traded at $720 per ounce. We have now come full circle.

The metal is currently showing a 20% loss over one month, and 3.5% on the one year timetable. Our long-stated (and much derided) $732 objective has been achieved, of that there is no doubt. The remaining question now emerging is: has gold seen its lows, or are we at the start of a phase in the mid-to-high $600's?

There is plenty of uncertainty on that front, for the moment. Maybe the next Hulbert metric will tell us more. So far, Merv Burak gets the prize for the week's call for new lows.

Fear not, for there will once again be plenty of: " No worries!" and " Back up the truck, honey! " calls coming from the usual suspects' quarters. Don't know, but it seems that most of these trucks must have broken gears, having been in reverse for so long.

Along with the alleged 'disconnect' between paper and physical prices. A broken story as well. Anyhow, copper lost 8.72 and lead lost 9.69 percent on the day. Oil? Off a "mere" $5.65 per barrel to $66.53 per barrel. Overnight markets experienced more of the same: the same surging US dollar, declining crude, pessimistic equities, and declining commodities.

The list of slumping currencies still headlines the ruble, the real, and the won (soon to be renamed the rubble, the unreal, and the lost). Moreover, the "Iceland Syndrome" appears to be spreading - this time, apparently starting to affect my parents' old stomping ground, Hungary. In a desperate attempt to stem a flight from the forint, the Magyar central bank raised rates to 11.5% today. Contrasting that move, reasonable expectations that the European central banks will soon cut rates to avoid the (likely) unavoidable.

The Dow caved in again, this time by 500-600 points - margin calls will soon follow. If anyone had doubts about the commodity sector somehow miraculously escaping the current mania for cash, they are searching for new careers right about now. Commodity-trading newsletter writing is so...90's. Gold took out the $732 level and sank as low as $718.90 intra-day ( a $50 loss, at one point). Another sizeable gain in the dollar brought it to 85.60 on the index. Something has to give? Not in this boxing match, not thus far.

New York spot dealings continued to find lower and lower bids, and were off by $45 at $725.00 at last check. While the decline is a perfectly wonderful and timely Diwali present to India, it still raises the possibility that the metal is becoming a "reverse hedge" in a world of crumbling values. Yes, bullion may fall further (targets include $675, and $640 - at this time), but it might lose less than that overpriced fixer-upper, or the sickly-looking basket of stocks the brokers are trying to keep one from tossing away.

Silver fell 60 cents to $9.43. Silver pundits have fallen silent or are trying to distract with stories of parallel universes. Quietly, India is turning this Diwali into a festival of...silver, but not much gold. As for bargain-basement prices, look over to platinum and palladium, as they wear freshly altered price tags of $829 (down $64) and $175 (off $6) on the dire news that US auto sales have not looked this grim in over a of a quarter century.

Gold may even rise, following whatever target the current slump takes it to, perhaps trying for $1K once again over the next 6 to 18 months - this, according to our friend Paul Walker over at GFMS in London. Paul bases his expectations of the four-digit achievement on a decoupling from the commodity complex based on its monetary attributes - some of which have come under serious testing of late. Thus far, that divorce appears to be in question, as gold continues to hold some very tight hands with oil and base metals. But, as always, caveat emptor - or speculator, as the case may be.

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